Delta Mech., Inc. v. Garden City Grp., Inc.

MEMORANDUM

Rheem Manufacturing Company, American Water Heater Company, the Bradford White Corporation, A.O. Smith Corporation, State Industries, Inc., and Lochinvar Corporation (collectively, the “manufacturers”) are manufacturers of water heaters. Delta Mechanical, Inc. (“Delta”) is a plumbing company. This appeal arises out of a class action settlement between the manufacturers and the owners of defective water heaters that had been produced by the manufacturers. The settlement agreement required the manufacturers to pay authorized third-party contractors to replace or repair the defective water heaters. Delta served as one of the authorized third-party contractors. The settlement agreement set forth the claims protocol that class members were required to follow in order to obtain the replacement or repair.

While Delta received over $3,000,000 from the manufacturers for providing nearly 24,000 repairs or replacements, the manufacturers refused to reimburse Delta for approximately $500,000 because Delta’s customers failed to follow the claims protocol in certain instances. Delta then filed the present action against the manufacturers. The district court granted summary judgment…