Kenmode Tool & Engineering, Inc. v. Technical Plating, Inc.

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Kenmode Tool & Engineering, Inc.,
Plaintiff and Counter
Defendant,
v.
Technical Plating, Inc.,
Defendant and Counter
Claimant.
File No. 24-cv-3756 (ECT/EMB)
OPINION AND ORDER
Erica Sarver, Bodman PLC, Detroit, MI, Stephen Paul Dunn, Bodman PLC, Troy, MI, and
Brandie L. Morgenroth and Kelly P. Magnus, Nilan Johnson Lewis PA, Minneapolis, MN,
for Plaintiff and Counter Defendant Kenmode Tool & Engineering, Inc.
Justice Ericson Lindell, Greenstein Sellers PLLC, Minneapolis, MN, for Defendant and
Counter Claimant Technical Plating, Inc.
A contract provided that Technical Plating would process certain metal parts for
Kenmode, and Kenmode would pass those parts on to its customer. 	When the customer
noticed defects in the parts, Technical Plating attempted to resolve the problem and offered
Kenmode credits to cover potential liability. 	Technical Plating then stopped providing
credits. Kenmode sued for breach of contract and several warranties, and Technical Plating
counterclaimed for a declaratory judgment that it had satisfied any liability under the
contract.
The parties filed cross-motions for summary judgment, and both motions will be
granted in part and denied in part. The contract has a provision limiting Technical Plating’s
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liability, and though it is enforceable as a matter of law, there is a factual question whether
it was waived. 	Even if it were not waived, Technical Plating has pointed out disputed
record evidence making breach a question for the factfinder. 	Kenmode’s motion will be
granted as to Technical Plating’s redundant counterclaim and otherwise denied.
I1
Kenmode 	manufactures metal goods and Technical Plating provides plating
services. 	Kenmode 	Tool 	& 	Engineering, 	Inc., 	manufactures 	metal 	stampings 	for
automotive, medical, defense, and other industries. 	ECF No. 67-1 at 9:24–10:17.
Kenmode contracts with other businesses for materials and services, id. at 10:18–22, and
has experience negotiating those contracts, id. at 11:14–25 (noting that Kenmode has been
in business for sixty-five years). Technical Plating, Inc., is one of its business partners. Id.
at 16:9–13. Technical Plating provides metal plating for conductor pins. Id. at 29:22–30:2.
In a nutshell, Kenmode would send parts to Technical Plating, which would apply a metal
plating and ship them back to Kenmode, which would them send the parts to Kenmode’s
customers. Id. at 18:8–14.
Kenmode and Technical Plating formed a contract. 	Kenmode and Technical
Plating formed a contractual agreement spread out in three documents: the Quotation, the
Terms and Conditions, and the Blanket Purchase Order. 	Compl. [ECF No. 1] ¶¶ 11–16;
ECF No. 15 at 2 ¶ 5 (Answer admitting allegation). 	In the Quotation, Technical Plating
quoted a price and quantity for its processing and finishing. 	ECF No. 1-1 at 2. 	The
1 	Unless otherwise noted, the facts are undisputed.
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Quotation made “[a]ll orders . . . subject to [Technical Plating’s] Terms and Conditions.”
Id. The Terms and Conditions laid out “the entire agreement between parties.” ECF No.
1-2 at 2; see ECF No. 67-1 at 24:12–16. 	In that document, Technical Plating warranted
that “processing and finishing shall meet customer’s specifications supplied in writing with
the order and that work processing and finishing shall be free from defect in material or
workmanship.” ECF No. 1-2 at 2. The third document is the Blanket Purchase Order, in
which Kenmode ordered metal plating at a specified thickness from Technical Plating.
ECF No. 1-3 at 2. The contract provided that Kenmode would ship conductor pins—“the
Parts”—to Technical Plating, which would apply the metal plating and ship the Parts back
to Kenmode. Id.; ECF No. 67-1 at 30:25–31:10.
The Terms and Conditions limited Technical Plating’s liability. 	The Terms and
Conditions included a damages cap. 	ECF No. 1-2 at 2. 	In full, it reads: “[Technical
Plating’s] liability for any cause is limited to the cost of direct labor and material of product
loss directly damaged by [Technical Plating’s] processing or two times [Technical
Plating’s] processing charges on such material, whichever is the lesser. 	[Technical
Plating’s] pricing is based on this policy, limiting liability.” Id.2
Technical Plating performed the services at a cost of $19,649.19. 	“Tech[nical]
Plating performed the plating and finish services and shipped the Parts to Kenmode.” ECF
No. 72-2 ¶ 5. 	The processing charges for this task totaled $19,649.19. 	ECF No. 15 at 7
2 	Earlier in this litigation, the parties disputed the applicability and meaning of the
contract’s notice requirement. 	See, e.g., ECF No. 27 at 6–7. 	The parties agree that this
issue is off the table for purposes of summary judgment.
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¶ 7 	(Counterclaim); 	ECF 	No. 	15-1 	(invoices); 	ECF 	No. 	16 	at 	2 	¶ 7 	(Answer 	to
Counterclaim admitting that the invoice collection “speaks for itself”); ECF No. 67-3
(showing invoice totals). 	Kenmode’s Vice President of Operations, Thomas Skibinski,
agreed that the processing charges equaled the sum of the figures in the “Extended
Purchase Cost” column of Exhibit 3. 	ECF No. 67-1 at 41:22–42:2; see ECF No. 67-3
(Exhibit 3); ECF No. 67 ¶ 4. 	That sum is $19,647.50554, a rounding error off from
$19,649.19. 	ECF No. 67-3; see ECF No. 65 at 5 & n.1 (explaining rounding error).
Technical Plating shipped the Parts to Kenmode, which shipped the Parts to its customer.3
ECF No. 72-2 ¶¶ 5–6.
The 	Parts 	had 	solderability 	problems, 	and 	Kenmode 	and 	Technical 	Plating
attempted to determine the root cause. 	“Kenmode’s customer notified Kenmode on
October 2, 2023, that the plating applied by Tech[nical] Plating to the Parts was incorrect
and defective, and not in accordance with the applicable specifications.” Id. ¶ 7; ECF No.
72-4 at 3 (email from customer to Kenmode). 	Kenmode informed Technical Plating on
October 4 that the customer was “having solderability issues” and asked if “the plating is
normal as the certification demonstrates.” ECF No. 72-5 at 2. The source of the problem
is disputed. Kenmode asserts that “the defects with the Parts were caused by Tech[nical]
Plating’s failures to use the correct program to verify the coating thickness of the plating.”
3 	In the pleadings, there was some dispute about this point. The Complaint asserted
that Technical Plating was to “ship the finished Parts directly to Kenmode’s customer.”
Compl. ¶ 19. 	Technical Plating admitted this allegation in its Answer. 	ECF No. 15 at 2
¶ 6. The parties now agree that Technical Plating shipped the Parts to Kenmode. See ECF
No. 65 at 4; ECF No. 71 at 4. At summary judgment, nothing hangs on this issue.
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ECF No. 72-2 ¶ 10. Technical Plating’s examination determined that the “root cause” was
“the old rectifiers,” ECF No. 73 at 2, which were “not sensitive enough to detect the actual
amperage of . . . the plating thickness to plate,” ECF No. 73-9 at 75:5–9; see ECF No. 72-3
at 25:2–4 (“[A rectifier] is an AC to DC power unit that’s used for metal finishing.”).
Technical Plating replaced the rectifiers. 	ECF No. 73 at 3; ECF No. 73-9 at 75:10–14.
However, Technical Plating’s admissions locate the problem not in the thickness of the
metal plating, but in its application. ECF No. 73-8 at 4. According to Technical Plating,
Kenmode’s “specifications for the thickness of the Parts was [sic] well below the industry
standards for soldering, which resulted in the failure.” Id. Brian Vang, a quality engineer
at Technical Plating, inspected the retains of the Parts, and he testified that “the thickness
called out for soldering is outside of what Kenmode was requesting for on their prints.”
ECF No. 73-9 at 14:23, 24:15–25:24, 33:14–16.
Technical Plating issued credits to Kenmode. 	From December 17, 2023, to
September 	30, 	2024, 	Technical 	Plating 	issued 	credits 	to 	Kenmode, 	which 	totaled
$77,979.83. 	See ECF No. 15 at 7 ¶ 11; ECF No. 16 at 3 ¶ 11 (“Kenmode states that
Technical Plating applied a credit in the amount of $77,979.83 . . . .”); ECF No. 15-3
(showing 	the 	credits 	with 	dollar 	values 	and 	dates); 	ECF 	No. 	67-1 	at 	65:17–24
(acknowledging receipt of the credits). 	Technical Plating “provided these credits to
Kenmode in order to cover any possible liability Technical Plating had for the allegedly
defective parts, as well as to attempt to maintain a working business relationship between
Technical Plating and Kenmode.” 	ECF No. 66 ¶ 4. 	On July 1, 2024, Technical Plating
issued a written credit memorandum (“Credit Memo”) to Kenmode “in the amount of
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$436,327 . . . , to apply [to] future invoices for future products plated by [Technical
Plating].” 	ECF No. 72-2 ¶ 14. 	Technical Plating informed Kenmode by email from the
“TPI Accounting” address and signed by Technical Plating’s office manager, Verna Keiser,
saying, “Here is the credit . . . . I will apply invoices to this credit.” ECF No. 73-4 at 3;
see ECF No. 72-1 at 21:13–18. Technical Plating’s President, Bryan Thomas, was copied
on that email. ECF No. 73-4 at 3; see ECF No. 72-1 at 7:21–24. Ms. Keiser was authorized
to issue credit memos without any monetary limits. ECF No. 72-1 at 22:5–16. The Credit
Memo’s “Description” section notes that it is “Credit for Chargeback Amount - various
Orders with Plating Issues.” 	ECF No. 73-3 at 2. 	The “Shipped Part” box lists the
identification code for the Parts. Id.; ECF No. 1-3 at 2.
There is a dispute about whether Technical Plating intended to send or honor the
Credit Memo. Kenmode’s director of purchasing, James Shotsberger, testified that he and
Mr. Thomas exchanged two calls about the credits in February and July 2024. 	ECF No.
73-5 at 5:23–25, 7:7–24, 9:9–12. 	According to Mr. Shotsberger, in the first call Mr.
Thomas did not say anything about a credit memo, but said he would “make [Kenmode]
whole and make it right.” Id. at 9:1–6. In the second call, Mr. Thomas “explicitly stated
that he was applying the credits against the 436,000.” Id. at 10:14–16. In neither call did
he state that he would not honor the Credit Memo. 	Id. at 13:3–7. 	Mr. Thomas saw it
differently. He could not remember any phone calls with Mr. Shotsberger. ECF No. 72-1
at 93:9–11. He testified that he did not authorize Ms. Keiser to issue credit in that amount;
instead, he intended to provide an “open credit memo” while Technical Plating determined
what the exact amount would be. ECF No. 72-1 at 22:4–16, 23:17–24:9. After Ms. Keiser
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sent the Credit Memo, Mr. Thomas was “a little in shock,” ECF No. 78-1 at 20:15–18, and
he determined she would not issue any more credit memos, ECF No. 72-1 at 24:18–23.
Kenmode requested that Technical Plating sign an accommodation agreement, but
Technical Plating did not sign it. 	On June 24, 2024, a Kenmode representative sent an
accommodation agreement to Mr. Thomas. 	ECF No. 79 ¶ 3; ECF No. 79-1. 	Under that
agreement, Technical Plating would “agree[] to reimburse Kenmode for the Chargeback
Amount” of $436,327 and rework the defective Parts.4 	ECF No. 79-1 at 4. 	Technical
Plating never signed the accommodation agreement. ECF No. 79 ¶ 4.
Technical Plating disavowed the Credit Memo. 	On July 16, 2024,5 Mr. Thomas
sent a letter to Kurt Gascho, Kenmode’s Vice President of Finance. ECF No. 73-6 at 2. In
that letter, Mr. Thomas stated that “Technical Plating is willing to rework the parts at our
expense.” 	Id. 	He also noted that Technical Plating had received the accommodation
agreement, was aware that Kenmode was requesting $436,327 in damages, and had
submitted the claim to Technical Plating’s insurer. 	Id. 	The insurer rejected that claim
“[a]fter months and months and months.” 	ECF No. 72-1 at 82:1–6. 	Around September
2024, Technical Plating “disavowed the Credit Memo and abruptly refused to supply its
plating application to any further parts for Kenmode.” ECF No. 72-2 ¶ 20; see ECF No.
4 	Ms. Keiser did not get the dollar value of the Credit Memo from the accommodation
agreement, but from an “Excel sheet” or “email” that is not in the record. ECF No. 78-1
at 23:10–20; ECF No. 72-1 at 90:20–24. Ultimately, the amount was the chargeback from
Kenmode’s customer, which Kenmode repaid in full. ECF No. 67-2 at 15 ¶ 21; ECF No.
67-1 at 66:17–25.
5 	This letter is dated July 16, 2023. At oral argument, the parties explained that the
year was a typographical error.
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73-8 at 5 (admitting that Technical Plating rescinded the Credit Memo). 	In the end,
Technical Plating provided $77,979.83 in credits to Kenmode. ECF No. 15 at 7 ¶ 11; ECF
No. 16 at 3 ¶ 11.
Kenmode filed suit and Technical Plating counterclaimed. Kenmode brought four
causes of action. 	They are breach of contract, Compl. ¶¶ 39–44, breach of express
warranty, id. ¶¶ 45–48, breach of the warranty of merchantability, id. ¶¶ 49–57, and breach
of the warranty of fitness for a particular purpose, id. ¶¶ 58–62. All the breaches concern
the alleged defects in the Parts’ plating; Kenmode does not claim that rescinding the Credit
Memo was a breach of duty. Technical Plating counterclaimed for a declaratory judgment,
seeking to establish that it already satisfied its liability to Kenmode. 	ECF No. 15 at 8–9
¶¶ 14–20.
II
Summary judgment is warranted “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). 	A fact is “material” only if its resolution might affect the
outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). A dispute over a fact is “genuine” only if “the evidence is such
that a reasonable jury could return a verdict for the nonmoving party.” Id.
“The evidence of the non-movant is to be believed, and all justifiable inferences are
to be drawn in his favor.” Id. at 255. When, as here, there are cross-motions for summary
judgment, each side receives the benefit of this rule in response to the other side’s
motion. 	See, e.g., Fjelstad v. State Farm Ins. Co., 845 F. Supp. 2d 981, 984 (D. Minn.
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2012). 	When considering Technical Plating’s motion, the record must be viewed in the
light most favorable to Kenmode, and when considering Kenmode’s motion, the record
must be viewed in the light most favorable to Technical Plating. See id.
III
The parties agree that Minnesota law applies. 	See Compl. ¶¶ 51, 55, 61 (citing
Minnesota statutes); ECF No. 65 at 6; ECF No. 71 at 8; see also Netherlands Ins. Co. v.
Main St. Ingredients, LLC, 745 F.3d 909, 913 (8th Cir. 2014) (“Because the parties do not
dispute the choice of Minnesota law, we assume, without deciding, Minnesota law applies
. . . .”).
In Minnesota, “[t]he primary goal of contract interpretation is to determine and
enforce the intent of the parties.” Staffing Specifix, Inc. v. TempWorks Mgmt. Servs., Inc.,
913 N.W.2d 687, 692 (Minn. 2018) (quoting Motorsports Racing Plus, Inc. v. Arctic Cat
Sales, Inc., 666 N.W.2d 320, 323 (Minn. 2003)). Contract terms are “given their plain and
ordinary meaning” and read in context of the whole contract. 	Motorsports Racing Plus,
Inc., 666 N.W.2d at 323–24. “Interpretation of unambiguous contracts is a question of law
for the court, as is the determination that a contract is ambiguous.” Staffing Specifix, Inc.,
913 N.W.2d at 692. 	If a contract is ambiguous, its interpretation is a question for the
factfinder. 	Denelsbeck v. Wells Fargo & Co., 666 N.W.2d 339, 346 (Minn. 2003). 	“A
contract’s terms are not ambiguous simply because the parties’ interpretations differ.”
Staffing Specifix, Inc., 913 N.W.2d at 692.
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A
Minnesota statutes govern the enforceability of remedy-limiting provisions in a
contract. Courts may refuse to enforce unconscionable provisions generally:
(1) If the court as a matter of law finds the contract or any
clause of the contract to have been unconscionable at the time
it was made the court may refuse to enforce the contract, or it
may 	enforce 	the 	remainder 	of 	the 	contract 	without 	the
unconscionable clause, or it may so limit the application of any
unconscionable clause as to avoid any unconscionable result.
(2) When it is claimed or appears to the court that the contract
or any clause thereof may be unconscionable the parties shall
be afforded a reasonable opportunity to present evidence as to
its commercial setting, purpose and effect to aid the court in
making the determination.
Minn. Stat. § 336.2-302. “An unconscionable contract is one which no man in his senses
and not under delusion would make on the one hand, and no honest and fair man would
accept on the other.” 	Residential Funding Co. v. Terrace Mortg. Co., 725 F.3d 910, 917
(8th Cir. 2013) (citation modified). 	“To establish unconscionability, a party must
demonstrate that it had no meaningful choice but to deal with the other party and to accept
the contract as offered.” Id. (citation modified). The Minnesota Supreme Court “has never
explicitly formulated an approach for determining whether a contract is unconscionable,”
Maslowski v. Prospect Funding Partners LLC, 994 N.W.2d 293, 306 (Minn. 2023) (Moore,
J., concurring), but courts applying Minnesota law generally require “the party asserting
unconscionability [to] show that the contract is both procedurally and substantively
unconscionable,” Carlson v. BMW Fin. Servs. NA, LLC, 762 F. Supp. 3d 820, 826
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(D. Minn. 2025) (citing Butler v. ATS Inc., No. 20-cv-1631 (PJS/LIB), 2021 WL 1382378,
at *19 (D. Minn. Apr. 13, 2021)).
Parties may also limit or exclude consequential damages “unless the limitation or
exclusion is unconscionable. Limitation of consequential damages for injury to the person
in the case of consumer goods is prima facie unconscionable but limitation of damages
where the loss is commercial is not.” 	Minn. Stat. § 336.2-719(3). 	In Minnesota,
consequential damages “include[] any unmitigated losses resulting from a seller’s failure
to live up to general or particular requirements that the seller at the time of contracting had
reason to know.” Far E. Aluminium Works Co. v. Viracon, Inc., 27 F.4th 1361, 1365 (8th
Cir. 	2022) 	(citation 	modified); 	see 	Minn. 	Stat. 	§ 336.2-715(2)(a). 	Limitations 	on
consequential damages, when made between merchants with “no great disparity in their
bargaining strength and where the claim is for commercial loss,” are not unconscionable.
Int’l Fin. Servs., Inc. v. Franz, 534 N.W.2d 261, 269 (Minn. 1995); Transp. Corp. of Am.,
Inc. v. Int’l Bus. Machines Corp., 30 F.3d 953, 960 (8th Cir. 1994) (“An exclusion of
consequential 	damages 	set 	forth 	in 	advance 	in 	a 	commercial 	agreement 	between
experienced 	business 	parties 	represents 	a 	bargained-for 	allocation 	of 	risk 	that 	is
conscionable as a matter of law.”).
Additionally, a liability limitation may be unenforceable “[w]here circumstances
cause an exclusive or limited remedy to fail of its essential purpose.” 	Minn. Stat.
§ 336.2-719(2). “When a sale of goods is between merchants, if the limited remedy fails
of its essential purpose, the consequential damage exclusion is still valid unless it is
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unconscionable.” 	Dart Transit Co. v. Paccar, Inc., 768 F. Supp. 3d 960, 972 (D. Minn.
2025) (citation modified)).
Parties may agree to liquidated damages for breach, “but only at an amount which
is reasonable in the light of the anticipated or actual harm caused by the breach, the
difficulties of proof of loss, and the inconvenience or nonfeasibility of otherwise obtaining
an adequate remedy.” 	Minn. Stat. § 336.2-718(1). 	In Minnesota, “‘liquidated damages’
signifies the damages the amount of which the parties to a contract stipulate and agree,
when the contract is entered into, shall be paid in case of breach.” 	See Frank v. Jansen,
226 N.W.2d 739, 743 (Minn. 1975) (quoting Schutt Realty Co. v. Mullowney, 10 N.W.2d
273, 276 (Minn. 1943)). In the ordinary case, the amount is fixed at the time of the contract,
see, e.g., id. at 742 (treating $2,000 downpayment as liquidated damages), or calculated as
a fixed amount per day, see, e.g., Eng’g & Constr. Innovations, Inc. v. Bradshaw Constr.
Co., No. 20-cv-808 (ECT/TNL), 2024 WL 5040395, at *33 (D. Minn. Dec. 9, 2024). The
Minnesota Supreme Court
has held that where the actual damages resulting from a breach
of the contract cannot be ascertained or measured by the
ordinary rules, 	a 	provision 	for 	liquidated 	damages 	not
manifestly disproportionate to the actual damages will be
sustained. On the other hand, when the measure of damages
resulting from a breach of contract is susceptible of definite
measurement, we have uniformly held an amount greatly
disproportionate to be a penalty.
Gorco Constr. Co. v. Stein, 99 N.W.2d 69, 75 (Minn. 1959) (footnotes omitted); accord In
re Bowles Sub Parcel A, LLC, 792 F.3d 897, 901 (8th Cir. 2015). “The controlling factor,
rather than intent, is whether the amount agreed upon is reasonable or unreasonable in the
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light of the contract as a whole, the nature of the damages contemplated, and the
surrounding circumstances.” 	Gorco Constr. Co., 99 N.W.2d at 74. 	Further, “the major
concern with liquidated damages provisions is unreasonably large liquidated damages.”
Tharalson v. Pfizer Genetics, Inc., 728 F.2d 1108, 1112 (8th Cir. 1984). 	The official
comments to the Uniform Commercial Code § 2-718 distinguish these scenarios and
analyze them separately: “A term fixing unreasonably large liquidated damages is
expressly made void as a penalty. 	An unreasonably small amount would be subject to
similar criticism and might be stricken under the section on unconscionable contracts or
clauses.” U.C.C. § 2-718, cmt.1. Minnesota courts are not bound by the official comments,
but those comments hold persuasive authority. 	See Valley Paving, Inc. v. Dexter &
Chaney, Inc., No. C2-00-361, 2000 WL 1182800, at *2 (Minn. Ct. App. 2000) (consulting
Uniform Commercial Code comments to interpret Minnesota contract law); In re EDM
Corp., 431 B.R. 459, 465 (B.A.P. 8th Cir. 2010) (“While official comments to the UCC
are not binding, they are persuasive in matters of interpretation.”); Thompson v. United
States, 408 F.2d 1075, 1084 n.15 (8th Cir. 1969).
Here, the damages cap unambiguously limits recovery to “the cost of direct labor
and material of product loss directly damaged by our processing or two times our
processing charges on such material, whichever is the lesser.” ECF No. 1-2 at 2. The first
calculation excludes consequential damages, and the second does functionally the same
thing, precluding recovery beyond twice the direct damages. 	It is the second calculation
that is at play. Technical Plating argues that the damages cap limits Kenmode’s recovery
to twice the processing charges, which comes to $39,298.38, and since Technical Plating
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has already issued credits for $77,979.83, Kenmode has been fully compensated under the
contract. See ECF No. 65 at 5.
The damages cap is an enforceable limitation of liability because it is not
unconscionable. 	The agreement was for commercial services. 	Kenmode had lengthy
experience negotiating contracts. See ECF No. 67-1 at 11:14–25. There is nothing in the
record to suggest a disparity in bargaining strength. 	As a matter of law, the liability
limitation is not substantively unconscionable. 	See Franz, 534 N.W.2d at 269; Transp.
Corp. of Am., Inc., 30 F.3d at 960. The record is bare as to the negotiation of the contract,
so there are no facts suggesting procedural unconscionability. 	Kenmode argues that the
damages cap fails of its essential purpose, ECF No. 75 at 9, but under Minnesota law, that
is no reason to invalidate a consequential-damages exclusion in a contract between
merchants over a “highly complex [and] sophisticated” “warranted item.” 	Viracon,
27 F.4th at 1366.
The better read of the contract is that it does not contain a liquidated damages clause,
so those rules do not apply. “A liquidated damages provision sets a fixed amount that can
be recovered upon breach without proof of any damage.” 	Tharalson, 728 F.2d at 1111
(citing W. Union Tel. Co. v. Nester, 309 U.S. 582, 587–88 (1940)). 	Here, the provision
requires proof of damages. See ECF No. 1-2 at 2 (“Our liability for any cause is limited to
the cost of direct labor and material of product loss directly damaged by our processing or
two times our processing charges on such material, whichever is the lesser.”). This is not
the ordinary case where the damages are fixed by contract, whether for one amount or per
day. It is true that some old or out-of-state cases analyze contracts that tether damages to
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a variable other than time as providing for liquidated damages. See Associated Cinemas of
Am. v. World Amusement Co., 276 N.W. 7, 8 (Minn. 1937) (analyzing provision where a
theater agreed “that as liquidated damages it would pay, in addition to the advance guaranty
of $200, ‘a sum equal to such percentage of the average daily gross receipts of such theatre
during the period of thirty (30) operating days immediately prior to the date or dates when
such photoplay should have been so exhibited’”); Missouri ex rel. Nixon v. Prudential
Health Care Plan, Inc. Cmty. Plan, 221 F. Supp. 2d 1016, 1017–18 (E.D. Mo. 2002)
(considering contract provision that stated, “liquidated damages may be assessed against
the health plan in an amount equal to the costs of obtaining alternative health benefits for
the member(s)”). 	But in World Amusement and Prudential Health Care, the contracts
identified the damages-limiting provisions as liquidated damages—the instant contract
does not. Kenmode cites no cases where a court applying Minnesota law treated a similar
provision as a liquidated damages clause. 	And even if it were a liquidated damages
provision, the better course would be to enforce it unless it is unconscionable, because it
sets a low ceiling for damages. As a matter of law, it is not unconscionable.
There is no factual dispute that Technical Plating has satisfied its obligations under
the liability limitation clause, so Technical Plating will be granted summary judgment on
that issue. 	The parties agree that the processing charges are $19,649.19. 	ECF No. 67-3
(sum of right-hand column); ECF No. 67-1 at 41:22–42:2. There is no dispute Technical
Plating provided $77,979.83 in credit to Kenmode. See ECF No. 15 at 7 ¶ 11; ECF No. 16
at 3 ¶ 11. The credits are more than twice the processing charges, so Technical Plating has
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paid its damages, if in fact it breached. Since the damages cap is enforceable, it will operate
unless it is waived.
B
“Waiver is the intentional relinquishment of a known right.” 	Frandsen v. Ford
Motor Co., 801 N.W.2d 177, 182 (Minn. 2011). 	“[T]he question of waiver is mainly a
question of intention,” Farnum v. Peterson-Biddick Co., 234 N.W. 646, 647 (Minn. 1931),
which “generally is a question of fact” for the jury, Valspar Refinish, Inc. v. Gaylord’s,
Inc., 764 N.W.2d 359, 367 (Minn. 2009). “When a party acts in a way that is inconsistent
with the terms of a contract, a fact finder can reasonably conclude that a party waived those
contractual provisions.” Id.; see Stephenson v. Martin, 259 N.W.2d 467, 471 (Minn. 1977)
(per curiam) (finding that waiver of subrogation right could be reasonably inferred from
settlement agreement that did not expressly reserve the right); Edelstein v. Duluth, M. &
I.R. Ry. Co., 31 N.W.2d 465, 473–74 (Minn. 1948) (finding plaintiffs had waived
enforcement of contract’s notice provision by litigating on the presumption that it did not
take effect), overruled on other grounds by, Andrews v. Louisville & Nash. R.R., 406 U.S.
320 (1972). “Although waiver can be express or implied, both types of waiver require an
expression of intent to relinquish the right at issue.” Frandsen, 801 N.W.2d at 182. Waiver
“must be manifested in some unequivocal manner.” 	Manor Warehouse & Delivery, Inc.
v. Gratton, A17-1647, 2018 WL 2770469, at *3 (Minn. Ct. App. June 11, 2018) (quoting
Ohio Confection Co. v. Eimon Mercantile Co., 191 N.W. 910, 911 (Minn. 1923)); see
Slidell, Inc. v. Millennium Inorganic Chems., Inc., 460 F.3d 1047, 1056 (8th Cir. 2006).
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“The burden of proving waiver rests on the party asserting waiver.” In re RFC & RESCAP
Liquidating Tr. Action, 332 F. Supp. 3d 1101, 1177 (D. Minn. 2018).
There is a factual dispute whether Technical Plating waived the liability limitation.
Kenmode points to evidence from which a reasonable juror could infer that Technical
Plating voluntarily relinquished its right to limit damages. 	Technical Plating issued the
Credit Memo for $436,327. ECF No. 72-2 ¶ 14. It did so through Ms. Keiser, who was
authorized to issue credit memos without any monetary limits. ECF No. 72-1 at 22:5–16.
Mr. Thomas promised to “make [Kenmode] whole” and “explicitly stated that he was
applying the credits against the 436,000.” 	ECF No. 73-5 at 9:1–6, 10:14–16. 	And
Kenmode applied credits in the amount of $77,979.83.6 	See ECF No. 15 at 7 ¶ 11; ECF
No. 16 at 3 ¶ 11. On the other hand, Technical Plating pointed out Mr. Thomas was taken
aback by Ms. Keiser issuing the Credit Memo, ECF No. 78-1 at 20:15–18, and that he
intended all along to offer an “open credit memo” while Technical Plating determined the
exact amount of damages, ECF No. 72-1 at 23:17–24:9. As he testified, Technical Plating
“provided these credits to Kenmode in order to cover any possible liability Technical
Plating had for the allegedly defective parts, as well as to attempt to maintain a working
business relationship between Technical Plating and Kenmode.” 	ECF No. 66 ¶ 4.
Technical Plating never signed the accommodation agreement that formalized the terms of
6 	The parties have not argued whether issuing credits in the amount of $79,979.83
waived the liability limitation clause, or whether Technical Plating partially waived that
provision. Kenmode expressly rejected the latter proposition. See ECF No. 81 at 6 (“When
one waives or abandons a known legal right, it does not do so partially.”).
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the Credit Memo. ECF No. 79 ¶ 4. There is a genuine factual dispute whether Technical
Plating waived its liability limitation.
Technical Plating argues that issuing the Credit Memo was merely a business
“attempting to resolve an issue arising with the products it provided to another business,”
which, it believes, is “insufficient to prove an intentional relinquishment of a known right.”
ECF No. 77 at 15 (citing Valspar, 764 N.W.2d at 368). 	This reliance on Valspar is
misplaced. In Valspar, the contract provided that the defendant would paint the plaintiff’s
products, and it included a provision requiring written notice of default. 	764 N.W.2d at
363. When the plaintiff discovered defects in the paint job—uneven coats, blotchy texture,
and mismatched colors, among other allegations—the defendant’s representatives met with
the plaintiff’s “production personnel to resolve [the] oral complaints.” 	Id. at 366. 	The
court concluded that “cooperation between businesses to resolve product performance
issues under a contract, without more, is insufficient to raise an issue of fact regarding
waiver of express terms of an agreement.” 	Id. at 368. 	It also noted that the contract
“expressly contemplate[d]” the defendant taking such action. Id. at 368 n.5. This case is
not Valspar. 	The credits did not attempt to “resolve product performance issues”—they
offered compensation for potential liability. 	Id. at 368; see ECF No. 66 ¶ 4 (“[Technical
Plating] provided these credits to Kenmode in order to cover any possible liability
Technical Plating had for the allegedly defective parts, as well as to attempt to maintain a
working business relationship between Technical Plating and Kenmode.”). A reasonable
jury could infer that Technical Plating’s monetary offer waived a contractual limitation on
monetary damages.
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At oral argument—though not in its briefing—Technical Plating relied heavily on
another case to stress this point, KBJR, Inc. v. Radio Frequency Systems, Inc., No.
09-cv-1186 (DWF/LIB), 2011 WL 494881 (D. Minn. Feb. 7, 2011). KBJR offers stronger
support, but it is also distinguishable. 	There, the court concluded there was no genuine
dispute over waiver of a contractual “repair or replace” limitation when the seller attempted
to fix the at-issue antenna and offered to absorb the cost of a replacement or provide credit
towards another antenna. 	KBJR, Inc., 2011 WL 494881, at *2, *4. 	The court construed
the credit offer as the seller’s attempt “to maintain its relationship with [the buyer] by going
beyond its obligations under the sales agreement.” 	Id. at *4. 	Here, Technical Plating
attested to another motivation for issuing credits—it wanted to “cover any possible
liability.” ECF No. 66 ¶ 4; see ECF No. 73-5 at 9:1–6 (Mr. Shotsberger’s testimony that
Mr. Thomas said he would “make [Kenmode] whole and make it right”). On these facts,
a reasonable jury could conclude that Technical Plating intended to waive its liability
limitation.
Because there is a genuine factual dispute over waiver, summary judgment is
inappropriate on that issue.
C
Technical Plating convincingly argues that there is a factual dispute about causation,
an element of each claim of breach of contract, express warranty, and the implied warranty
of merchantability. ECF No. 77 at 16; see Reuter v. Jax Ltd., Inc., 711 F.3d 918, 920 (8th
Cir. 2013) (stating that, to prevail on breach of contract, the plaintiff must show damages
were caused by the breach); Duxbury v. Spex Feeds, Inc., 681 N.W.2d 380, 393 (Minn. Ct.
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App. 2004) (same for breach of express warranty); Driscoll v. Standard Hardware, Inc.,
785 N.W.2d 805, 816 (Minn. Ct. App. 2010) (same for breach of implied warranty of
merchantability). In responding to Kenmode’s requests for admissions, Technical Plating
admitted it use an “incorrect application” on “some of the parts,” and that its application
“resulted in false readings of the plating’s thickness,” again for “some of the parts.” ECF
No. 73-8 at 4. 	But Technical Plating asserted that Kenmode’s “specifications for the
thickness of the Parts was well below the industry standards for soldering, which resulted
in the failure.” Id. Mr. Vang testified that “the thickness called out for soldering is outside
of what Kenmode was requesting for on their prints.” 	ECF No. 73-9 at 33:14–16.
Kenmode does not address this argument in either brief supporting its summary-judgment
motion. This factual dispute as to causation means summary judgment is not justified as
to these claims.
The breach of the implied warranty of fitness for a particular purpose has slightly
different elements, and though Technical Plating does not directly address that claim, it has
shown a factual dispute there too. “Breach of an implied warranty of fitness for intended
use requires proof that: (1) the seller had reason to know of the buyer’s particular purpose;
(2) the seller had reason to know that the buyer was relying on the seller’s skill or judgment
to furnish appropriate goods; and (3) the buyer’s actual reliance.” Driscoll, 785 N.W.2d at
817; accord Willmar Cookie Co. v. Pippin Pecan Co., 357 N.W.2d 111, 115 (Minn. Ct.
App. 1984); see Minn. Stat. § 336.2-315. 	Technical Plating’s admissions establish a
factual dispute whether it knew of Kenmode’s purposes. 	See ECF No. 73-8 at 4
(“Technical Plating was unaware the Parts would be soldered.”). Mr. Thomas testified that
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in the “30-plus years” he had become familiar with several Kenmode customers, and they
mostly used solderless connectors, and that he could not tell by looking at a quote whether
the part would eventually be soldered or solderless. 	ECF No. 72-1 at 54:3–55:12.
Kenmode argues that Technical Plating knew Kenmode’s customer would incorporate the
Parts as automotive components. ECF No. 71 at 14; see ECF No. 72-2 ¶ 4 (“Tech[nical]
Plating was aware of the end-use of [the Parts].”). The contract documents, however, do
not establish that element at the certainty required to grant summary judgment. See ECF
No. 1-1 (making no mention of soldering); ECF No. 1-3 (same). So summary judgment is
not appropriate on this claim either.
D
Finally, 	Kenmode 	moves 	for 	summary 	judgment 	on 	Technical 	Plating’s
Counterclaim for declaratory relief. 	ECF No. 71 at 20–21; ECF No. 81 at 9. 	The
Counterclaim seeks a judgment declaring that “pursuant to the Contract, Technical Plating
is not required to refinish the Parts free of charge, Technical Plating’s maximum liability
for the allegedly defective Parts is $39,298.38, and Technical Plating has already satisfied
any liability to Kenmode for the allegedly defective Parts.” 	ECF No. 15 at 9 ¶ 20.
Technical Plating did not respond to the argument that this claim is impermissibly
redundant.
Courts reject redundant declaratory-judgment claims as improper. Mille Lacs Band
of Chippewa Indians v. Minnesota, 152 F.R.D. 580, 582 (D. Minn. 1993). “When deciding
whether to dismiss a counterclaim as redundant, courts consider whether the declaratory
judgment serves a useful purpose.” 	Great Lakes Gas Transmission Ltd. P’ship v. Essar
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Steel Minn., LLC, 871 F. Supp. 2d 843, 862 (D. Minn. 2012) (quoting Gratke v. Andersen
Windows, Inc., No. 10-cv-963 (PJS/LIB), 2010 WL 5439763, at *3 (D. Minn. Dec. 8,
2010), R. & R. adopted, 2010 WL 5441940 (D. Minn. Dec. 28, 2010)). “Such an analysis
‘requires consideration of whether resolution of plaintiff’s claim, along with the affirmative
defenses asserted by defendants, would resolve all questions raised by the counterclaim.’”
Id. (quoting Gratke, 2010 WL 5439763, at *3).
Kenmode’s motion for summary judgment will be granted as to the declaratory
judgment Counterclaim for two reasons. 	First, Technical Plating waived the claim by
failing to respond. 	See Doll v. Trellis Walnut Towers LLC, No. 24-cv-136 (ECT/TNL),
2024 WL 4355084, at *3 (D. Minn. Sep. 30, 2024) (collecting cases). 	Second, the
Counterclaim serves no useful purpose, because resolving Kenmode’s claims entails
resolving the Counterclaim. 	Technical Plating’s Counterclaim essentially reprises its
argument that the liability limitation clause is enforceable and the credits have satisfied any
liability owed. There is no need to send this redundant claim to trial.
ORDER
Based on the foregoing, and on all the files, records, and proceedings herein, IT IS
ORDERED THAT:
1. 	Defendant and Counter Claimant Technical Plating, Inc.’s Motion for
Summary Judgment [ECF No. 63] is GRANTED IN PART as follows: 	The contract’s
liability limitation is valid and enforceable. Technical Plating’s motion is DENIED in all
other respects.
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2. 	Plaintiff and Counter Defendant Kenmode Tool & Engineering, Inc.’s
Motion for Summary Judgment [ECF No. 69] is GRANTED IN PART as follows:
Kenmode 	is 	awarded 	summary 	judgment 	on 	Technical 	Plating’s 	counterclaim 	for
declaratory relief. Kenmode’s motion is DENIED in all other respects.
Dated: April 22, 2026 	s/ Eric C. Tostrud
Eric C. Tostrud
United States District Court
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