Manitowoc Marine Group, LLC v. Ameron International Corp. (424 F. Supp. 2d 1119, 2006)

DECISION AND ORDER

GRIESBACH, District Judge.

This case arises out of the construction of a combination oil tank barge and tug boat by Manitowoc Marine Group, LLC, (Manitowoc) for Vessel Management Services, Inc. (VMS), a wholly owed subsidiary of Crowley Maritime Corporation. The contract between Manitowoc and VMS called for the application of Amercoat 253, an epoxy coating manufactured by Ameron International, on the inside of the cargo tanks on the barge. Manitowoc contracted with International Marine & Industrial Applicators, Inc. (IMIA), to apply the coating. Shortly after delivery of the tug and barge to VMS, the epoxy coating began to delaminate and had to be replaced. Mani-towoc hired IMIA to re-apply the coating and then brought this action against VMS for the balance due on its contract and against Ameron and IMIA for the additional expenses it incurred as a result of the coating failure. VMS and the other defendants filed counterclaims against Manitowoc and cross-claims against each other. The citizenship of the parties being diverse, this court has jurisdiction under 28 U.S.C. § 1332.

VMS is no longer a party to the case, and Manitowoc and IMIA have settled their claims against each other. What remains are Manitowoc’s claims against Am-eron for breach of express and implied warranties, IMIA’s cross-claim against Ameron for fraudulent suppression, and Ameron’s counterclaims against Manito-woc for breach of contract and unjust enrichment. Ameron has now moved for summary judgment on all the claims against it. For the following reasons, Am-eron’s motion will be granted but only in part. Summary judgment will be granted on IMIA’s claim against Ameron for fraud. In all other respects, however, Ameron’s motion will be denied.

SUMMARY JUDGMENT STANDARD

Summary judgment is proper if the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party has the initial burden of demonstrating that it is entitled to summary judgment. Id. at 323, 106 S.Ct. 2548. Once this burden is met, the non-moving party must designate specific facts to support or defend its case. Id. at 322-24, 106 S.Ct. 2548.

In analyzing whether a question of fact exists, the court construes the evidence in the light most favorable to the party opposing the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The mere existence of some factual dispute does not defeat a summary judgment motion, however; there must be a genuine issue of material fact for the ease to survive. Id. at 247-48, 106 S.Ct. 2505. “Material” means that the factual dispute must be outcome-determinative under governing law. Contreras v. City of Chicago, 119 F.3d 1286, 1291 (7th Cir.1997). Failure to support any essential element of a claim renders all other facts immaterial. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. A “genuine” issue of material fact requires specific and sufficient evidence that, if believed by a jury, would actually support a verdict in the nonmovant’s favor. Fed. R.Civ.P. 56(e); Anderson, 477 U.S. at 249, 106 S.Ct. 2505. Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

With these principles in mind, I now turn to the facts of the case.

FACTS

In March 2001, Manitowoc and VMS began negotiating an agreement pursuant to which Manitowoc would construct a combination oil tank barge and tug unit for VMS at Manitowoc’s shipyard in Sturgeon Bay, Wisconsin. (Ameron PFOF ¶ 3; Manitowoc PFOF ¶ 4.) VMS had previously purchased two such units from a company known as Friede, Goldman, Halter, Inc. (Halter), but due to Halter’s financial difficulties VMS had decided to look for a new builder. (O’Hern Dep. at 87:19-88:5.)

The specifications for the barges called for application of Ameron’s Amercoat 253 to the cargo tanks of the barge. (Ameron PFOF ¶4.) VMS specified Amercoat 253 as the coating for the cargo tanks on the barges based on its own investigation and recommendations from maritime contractors and operators, none of which is a party to this case. (Schleuter Dep. at 28:1-14.) VMS also wanted a five-year extended warranty on the coating for the cargo tanks and had negotiated directly with Ameron in order to obtain it. With respect to the two units built by Halter, Ameron had agreed to provide a warranty that would run to Halter for the first two years (the extent of Halter’s warranty period), and thereafter run directly to VMS. VMS wanted the same warranty on the barges constructed by Manitowoc, except that it would cover the contractor only one year instead of two because of the shorter contractor warranty Manitowoc was offering. (Schleuter Dep. at 32-40.) Manito-woc undertook to “engage Ameron” to secure such a warranty for VMS. (O’Hern Dep. at 91:15-92:5.)

On April 23, 2001, Ameron provided Manitowoc with a written quotation entitled “Coatings System and Cost Proposal” which set forth cost and product information for the coatings to be used on the vessel. For the interior cargo tanks and slop tanks, Ameron specified Amercoat 253. In a letter accompanying its proposal, Ameron stated it would provide “a qualified, full time Technical Serviceman and would also provide the owner with a warranty covering the cargo tank linings on this project.” (Krutz Aff., Ex. J.)

On May 9, 2001, Jon Schauske, Manito-woc’s production manager on the project, provided Ameron with a copy of Manito-woc’s paint specification for various portions of the vessel and the criteria that Manitowoc intended to utilize in preparation for the coating. Schauske asked Am-eron to review the enclosures and respond to two questions:

1) Would you agree that the criteria standard is acceptable for your coating system?

2) Would Ameron stand by the coating systems and supply your warranty to our perspective [sic] customer?

(Krutz Aff., Ex. K.)

Thomas Brown, Director of Marine Marketing for Ameron, responded to Schauske’s questions by letter dated May 31, 2001. Brown first noted that the proposed warranty was negotiated with Ed Schleuter of VMS and would be directly between Ameron and VMS. Brown also noted, however, that “we can amend the recipiant [sic] to suit any contract obligations that you may have with VMS to include this within your normal Builder’s Warranty.” (Krutz Aff., Ex. L.) With respect to Manitowoc’s proposed specification, Brown noted that the specification Ameron had provided in its initial proposal was based on its recommendations to VMS upon consideration of the intended cargo for the tanks and the expected service life for the barges in a coastal seawater environment. Since Manitowoc had proposed no change to those specification for the cargo tanks, Brown indicated Ameron had no objection and that portion would not be at risk. Brown further stated, however, that Manitowoc’s “proposed procedure for secondary surface preparation of the shop primer, erection welds and other disturbed areas in the ballast tanks would necessitate our having to modify our Warranty in those areas.” (Krutz Aff., Ex. L.) Brown recommended several changes for secondary surface preparation in the ballast tanks and interior surfaces, and suggested that both Ameron and Manitowoc discuss the issue with VMS. (Id.)

After receiving Ameron’s response, Schauske and Jack Schmidt of Manitowoc called Brown to discuss Ameron’s requirements for surface preparation. (Krutz Aff., Ex. M.) In particular, Schauske and Schmidt were concerned over Ameron’s requirement that the surface interiors of the ballast tanks be power washed prior to application. Manitowoc believed that power washing was not an option in a cold weather region without significantly increasing the labor and materials budget. Although Brown seemed to understand Manitowoc’s position, he expressed little hope that Ameron would be willing to provide the warranty VMS had requested if its surface preparation requirements were not met. (Krutz Aff., Ex. M. and Ex. N.) Finally, after a series of email exchanges, Ameron and Manitowoc apparently reached agreement. On June 4, 2001, Brown confirmed with Edward Schlueter, the Director of VMS, that Ameron would provide the previously agreed performance warranty for the ballast tanks based on the surface preparation requirements Manitowoc had agreed to meet. Brown also confirmed that “the Warranty for the cargo tanks shall also be extended based upon the existing specification.” (Krutz Aff., Ex. Q.)

Manitowoc and VMS finalized their agreement shortly thereafter and entered into a written Vessel Construction Contract on June 19, 2001. (Hanus Aff., Ex. 7.) With respect to paint and other eoat-ings, the Vessel Construction Contract between Manitowoc and VMS provided:

... Contractor warrants that it will purchase paint of good marine quality with a five (5) year manufacturer’s and/or supplier’s warranty applicable to ballast and cargo tanks and that it will apply the paint in accordance with the manufacturer’s specifications and recommendations. The manufacturer’s and/or supplier’s warranty (Third Party Paint Warranty) shall be transferred and assigned to Owner immediately after the Contractor Warranty Period. Owner agrees to maintain at all times during the Third Party Paint Warranty period detailed records of all cargo carried in the Unit and all cleaning, maintenance and repair (whether ordinary or extraordinary) records with respect to the Unit (collectively, the Required Records). The Third Party Paint Warranty shall be null and void in the event Owner fails to maintain the Required Records in accordance with this Article VII.

(Hanus Aff., Ex. 7 at 12.) In July of 2001, VMS exercised an option to have a second tug-barge unit (550-4) built. (Id. ¶ 6.) It is that unit that is the subject of the lawsuit between the parties.

Manitowoc never signed a written warranty agreement with Ameron. On April 23, 2002, apparently in response to a request from Schauske, Brown provided Manitowoc a copy of the written warranty agreement Ameron had entered into with Halter, the previous builder. In a cover letter, Brown stated:

Attached is a copy of the Warranty for the cargo tank that we are providing to the Builder for the first two years, to coincide with the Builder’s Warranty.

After that period the Warranty is a matter between ourselves and VMS.

This particular Warranty is for two years to coincide with Halter’s warranty. Should [Manitowoc]’s be for a different period please let me know so we can amend the document.

Please also be advised that we have not offered VMS any Warranty for any other areas of the vessel.

Should you have any questions please give me a call.

(Krutz Aff., Ex. R.) There is no evidence that Sehauske or anyone else at Manitowoc ever got back to Brown and requested a written warranty from Ameron that specifically named Manitowoc as the beneficiary.

On July 2, 2002, Manitowoc purchased Amercoat 253 for 550-4 by submitting a purchase order to Ameron. Although, surprisingly, no copy of the purchase order issued by Manitowoc appears in the record, the record does contain a copy of Manitowoc’s standard terms that appeared on the back of its purchase order. (Hanus Aff., Ex. 4, Resp. to Interrog. 1; Ex. 6, Doc. M04330.) With respect to the question of warranties, the purchase order provided:

SELLER warrants that the items and services covered hereunder will conform to applicable specifications, instructions, drawings, data and samples, WILL BE MERCHANTABLE, of good material and workmanship, free from defects and WILL BE FIT AND SUFFICIENT FOR THE PURPOSE INTENDED. These warranties shall be in addition to all other warranties, express, implied or statutory. Payment for, inspection of, or receipt of articles or services shall not constitute a waiver of any breach of warranty.

(Hanus Aff., Ex. 6, Doc. M04330.)

Ameron replied by sending an acknowledgment to Manitowoc. (Krutz Aff., Ex. S.) The acknowledgment contained the following disclaimer of warranties:

Ameron warrants its products to be free from defects in material and workmanship. Ameron’s sole obligation and Buyer’s exclusive remedy in connection with the products shall be limited, at Amer-on’s option, to either replacement of products not conforming to this Warranty or credit to Buyer’s account in the invoiced amount of the nonconforming products. Any claim under this Warranty must be made by Buyer to Amer-on in writing within five (5) days of Buyer’s discovery of the claimed defect, but in no event later than the expiration of the applicable shelf life, or one year from the delivery date, whichever is earlier. Buyer’s failure to notify Ameron of such nonconformance as required herein shall bar Buyer from recovery under this Warranty.

AMERON MAKES NO OTHER WARRANTIES CONCERNING THE PRODUCTS. NO OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED, OR STATUTORY, SUCH AS WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, SHALL APPLY. IN NO EVENT SHALL AMERON BE LIABLE FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES.

Any recommendation or suggestion relating to the use of the products made by Ameron whether in its technical literature on in response to specific inquiry, or otherwise, is based on data believed to be reliable; however, the products and information are intended for use by Buyers having the requisite skill and know-how in the industry, and therefore it is for Buyer to satisfy itself of the suitability of the products for its own particular use and it shall be deemed that Buyer has done so, at its sole discretion and risk. Variations in environment, changes in procedures of use, or extrapolation of data may cause unsatis- , factory results.

(McCarthy Aff., Ex. 2.) Ameron’s product data sheet, which Manitowoc had in its possession at least by April 25, 2002, contained a substantially identical disclaimer. (Hanus Aff., Ex. 11.)

Manitowoc hired IMIA to apply the cargo tank paint to cargo barge unit 550-i. (Ameron PFOF ¶ 9.) IMIA applied Amer-coat 253 to the cargo tanks during the fall of 2002. Construction of 550-4 was substantially complete on December 9, 2002, and the unit departed soon thereafter for Jacksonville, Florida. (Id. ¶ 11.) While 550-4 was in Jacksonville, Manitowoc noticed a brownish goo known as amine blush on the surfaces of the cargo tanks. (Id. ¶ 12.) Attempts to clean the amine blush led to delamination of the cargo tank paint, which eventually had to be replaced at a cost of approximately $1.8 million, $1.3 million of which represents unpaid invoices submitted to Manitowoc by IMIA for its time and materials in re-coating the cargo tanks. (Id. ¶ 13.). Manitowoc’s and IMIA’s experts now state that the low temperatures at which Amereoat 253 was applied and the relatively short induction times during the application caused the problems with the paint. (Hare Dep. at 92:10-15; Machen Dep. at 189:6-14; see also Krutz Aff., Ex. Y at 27-31.) As a result, Manitowoc and IMIA have settled their claims against each other, with IMIA agreeing to dismiss its claims against Man-itowoc for the $1.3 million in outstanding invoices in return for a percentage of the recovery, if any, against Ameron. (Hanus Aff., Ex. 12.)

As the case stands now, Manitowoc claims that Ameron expressly and impliedly warranted that Amereoat 253, if applied in accordance with Ameron’s specifications, would not fail. Manitowoc contends that the evidence shows that the Amereoat was applied according to Ameron’s specifications. Since the coating clearly failed, Manitowoc argues that Ameron is liable for costs it incurred in removing the original coating and applying a new coating to the cargo tanks. For its claim, IMIA alleges that Ameron fraudulently withheld information that Amereoat 253 has a propensity for amine blush, that Ameron had experienced similar product failures on the Mississippi coast during the summer of 2002, and that the product required longer induction times in cold weather than those recommended on Ameron’s Product Data Sheet. IMIA contends that Ameron had a duty to disclose such information to IMIA and that its failure to do so constitutes fraud both under the law of Alabama, which IMIA contends should apply to its claim, and the law of Wisconsin.

Ameron, on the other hand, denies that it gave any express warranty to Manito-woc. Since no express warranty was given to Manitowoc, Ameron claims that summary judgment should be granted on Manitowoc’s claim for breach of express warranty. Ameron also contends that Manitowoc cannot recover under any implied warranty of merchantability or fitness for a particular purpose. Manitowoc cannot recover for breach of an implied warranty of merchantability, Ameron argues, because there is no evidence of any design or manufacturing defect in its product. And Manitowoc cannot establish a claim for breach of an implied warranty of fitness for a particular purpose, Ameron contends, because it is undisputed that Manitowoc did not rely on Ameron’s skill and judgment to select Amercoat 253. Moreover, even if there was evidence to support a claim under an implied warranty, Ameron argues that it effectively disclaimed such warranties as to Manitowoc. Thus, Ameron contends, summary judgment should be granted on Manitowoc’s claims for breach of an implied warranty as well. As to IMIA’s claim for fraud, Ameron argues that the evidence supports no such claim under Wisconsin law, which it contends is the only law that applies. Finally, Ameron argues that because IMIA has no direct claim against it for $1.3 million Manitowoc owes it for re-coating the cargo tanks, and because IMIA has dismissed its claim for the unpaid invoices against Manitowoc, any claim Mani-towoc may have against Ameron cannot include that amount.

ANALYSIS

I. Express Warranty

Under Wisconsin law, a warranty is “an assurance by one party to a contract of the existence of a fact upon which the other party may rely.” Dittman v. Nagel, 43 Wis.2d 155, 168 N.W.2d 190, 193 (1969) (citation omitted). Generally, a warranty is a representation as to the quality or quantity of goods sold and it “relieve[s] the promisee of any duty to ascertain the fact for himself, and amounts to a promise to indemnify the promisee for any loss if the fact warranted proves untrue.” Id. at 193 (citation omitted). A warranty thus places the burden of ascertaining the truth of the representation on the seller so that the buyer is not required to confirm the warranted facts. The creation of warranties in connection with a contract for the sale of goods is governed by the Uniform Commercial Code. Section 2-313 of the Uniform Commercial Code, as adopted in Wisconsin, provides:

Express warranties by the seller are created as follows:

(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.

Wis. Stat. § 402.313(1).

Ameron contends that any express warranty it made ran only to VMS, not Manitowoc, and thus Manitowoc has no remedy against it. Although the evidence shows that Ameron offered to provide an express warranty to Manitowoc, Ameron contends Manitowoc never requested one and thus none was ever provided. In Ameron’s view, the record discloses nothing more than “hypothetical discussions between Ameron and Manitowoc about the mere possibility of providing a written warranty to Manitowoc.” (Ameron Reply Br. in Supp. of Summ. J. on Claims of Manitowoc at 1.) It argues that since the essential terms of a written warranty between Ameron and Manitowoc were never agreed to, no warranty was given to Mani-towoc.

Ameron confuses the requirements for the formation of a contract with what is needed for the creation of a warranty. It is true that for a contract to be formed, the parties must reach agreement on the essential terms. Management Computer Services, Inc. v. Hawkins, Ash, Baptie & Co., 206 Wis.2d 158, 557 N.W.2d 67, 75 (1996). And “[u]nder Wisconsin law, agreements to agree do not create binding obligations.” Skycom Corp. v. Telstar Corp., 813 F.2d 810, 814 (7th Cir.1987) (citing Witt v. Realist, Inc., 18 Wis.2d 282, 118 N.W.2d 85, 93-94 (1962)). Here, however, there is no dispute that Manitowoc and Ameron entered into a contract. Ameron agreed to sell and Manitowoc agreed to buy enough Amereoat 253 to cover the interior cargo and ballast tanks on the oil transport barge Manitowoc was building for VMS. The question here is not whether Manitowoc and Ameron entered into a contract; the question here is whether Amer-on created an express warranty.

The requirements for the creation of a warranty are not as onerous as those for the creation of a contract. The fact that Ameron never provided Manitowoc a warranty in writing does not mean that no express warranty was provided at all. Under Wisconsin law, a warranty need not be in writing to be enforceable. See Elvers v. Eisenzopf, 88 Wis.2d 482, 276 N.W.2d 802, 804-05 (1979) (holding that store clerk’s statement that items sold were suitable for placement in salt water aquarium sufficient to create an express warranty). Nor is it necessary that the seller use specific words or even intend to create a warranty. Id. at 805; Wis. Stat. § 402.313(2). All that is required is that the seller make an affirmation of fact or a promise to the buyer and that the affirmation of fact or promise by the seller becomes “a basis of the bargain.” Wis. Stat. § 402.313(l)(a). Moreover, the affirmation or promise does not have to be the sole basis for the sale; it need only be “a factor in the purchase.” Ewers, 276 N.W.2d at 805. The question of whether a seller’s affirmation created an express warranty “normally is one of fact.” Id. (quoting U.C.C. § 2-313 cmt. 3).

Based on the evidence in the record, I conclude that a reasonable jury could find that Ameron created an express warranty in the course of its negotiations with Mani-towoc. A jury could find from the evidence that Ameron assured Manitowoc that if Amereoat 253 was applied to the cargo tanks according to the specifications to which the parties had agreed, it would not fail for at least five years. It was just such a warranty, after all, that VMS insisted that Manitowoc provide if Manitowoc was to construct its vessel, and Manitowoc negotiated directly with Ameron in order to make sure Ameron would provide it before it finalized its agreement with VMS. Manitowoc needed assurance that Ameron would provide the warranty VMS was demanding, and Ameron gave that assurance when the parties reached agreement on how the product was to be applied. The suggestion implicit in Ameron’s argument that no warranty could have been created in favor of Manitowoc, the anticipated buyer of the product, in the absence of a clear and unequivocal statement by Ameron that it was providing a warranty directly to Manitowoc is contrary to language and intent of the U.C.C. See Wis. Stat. § 402.313(2) (“It is not necessary to the creation of an express warranty that the seller use formal words such as ‘warrant’ or ‘guarantee’ or that the seller have a specific intention to make a warranty.”). The evidence shows that in essence, if not in the precise words, Ameron told Manito-woc that if its product was applied in the manner agreed upon, it would not fail for five years. This is sufficient to create an express warranty.

Ameron next argues that no express warranty was created in favor of Manitowoc because Manitowoc did not rely on any statement or promise made by Ameron in deciding to purchase its product. The sole reason Manitowoc purchased Amercoat 253, Ameron argues, was because VMS specified that product as the epoxy that was to be used to coat the interior of the cargo and ballast tanks. Ameron cites the official comment to U.C.C. § 2-313, which states that “‘‘[express’ warranties rest on ‘dickered’ aspects of the individual bargain, and go so clearly to the essence of that bargain that words of disclaimer in a form are repugnant to the basic dickered terms.” U.C.C. § 2-313 cmt. 1. Because VMS made the decision to use Amercoat 253, Ameron claims Manitowoc cannot prove that it relied upon any promise or affirmation of fact made by Ameron in deciding to purchase the product. According to Ameron, “Manitowoc did not ‘dicker’ with Ameron and did not purchase the paint because of, or in reliance upon, any representations by Amer-on.” (Ameron Br. In Supp. of Mot. for Summ. J. at 10.)

On this issue also, however, I conclude a reasonable jury could find otherwise. It is true that VMS specified Amercoat 253 as the coating for the cargo tanks. But Man-itowoc did not finalize its contract with VMS until it had obtained direct assurances from Ameron that Ameron would stand behind its product. Manitowoc’s internal memoranda clearly suggest that Manitowoc would not have entered into the contract, as proposed by VMS, if Ameron had not represented that the application procedure to which Manitowoc agreed would be acceptable to Ameron and that Ameron would warrant that its product would last at least five years. In his June I, 2001 memo, Schauske noted that when Brown told him he would have to get back to him on Monday on whether Ameron would accept surface, preparation that did not, include power-washing, Schauske told Brown “that was too late and this contract was going to move ahead or be lost today.” (Krutz Aff., Ex. N.) Even Ameron’s own documents recognize that Manitowoc wa$ relying on Ameron’s representations in deciding whether to proceed with VMS. In a June 1, 2001 fax to VMS describing the difficulties Manitowoc was having meeting Ameron’s demands, Brown acknowledges that Manitowoc “needs a response from us urgently as they were trying to finalize their negotiations with VMS.” (Krutz Aff., Ex. O.) This evidence suggests that had Manitowoc not reached agreement with Ameron over surface preparation, Manito-woc would not have entered into its contract with VMS, and had it not entered into that contract, Manitowoc would not have purchased Ameron’s product. Thus, a jury could reasonably find that Manito-woc relied upon Ameron’s representations in deciding to purchase Amercoat 253.

II. Implied Warranties

Manitowoc also claims Ameron breached its implied warranties of merchantability and fitness for a particular purpose. Even where no express warranties are given, U.C.C. § 2-314 provides that “[ujnless excluded or modified, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.” Wis. Stat. § 402.314. In addition, U.C.C. § 2-315 states that “[w]here the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded or modified ... an implied warranty that the goods shall be fit for such purpose.” Wis. Stat. § 402.315. Manitowoc claims that both of these implied warranties arose under the circumstances of this case and that there exists sufficient evidence to show that Ameron breached them.

The term “merchantable,” as defined in the U.C.C., includes the assurance that the goods purchased are “[a]re fit for the ordinary purposes for which such goods are used.” Wis. Stat. § 402.314(2)(c). Manitowoc contends that a jury could conclude that the Amercoat 253 it purchased from Ameron was not merchantable in that it was not fit for the ordinary purpose for which it was used. Manitowoc notes that the ordinary purpose for which the product was used was as a liner to protect the interior of the cargo tanks from the corrosive effects of the invasive cargos that the tanks were to carry. Clearly, the product failed to fulfill that purpose; almost immediately after it was applied, amine blush developed and the paint began to severely delaminate. Although Ameron contends that the product failed because it was not properly applied, there is evidence from which a jury could conclude that it was applied in accordance with the instructions provided by Ameron. A product that fails to accomplish its ordinary purpose when used in accordance with the merchant’s instructions is not merchantable. Thus, there is evidence from which a jury could conclude that Ameron breached an implied warranty of merchantability.

With respect to an implied warranty of fitness for a particular purpose, Ameron argues that Manitowoc has adduced no evidence that Manitowoc relied on Ameron’s skill and judgment to select the coating for the interior cargo tanks. In its Amended Complaint, Manitowoc pled that