Mortenson V. Timberline

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1 of 3 DOCUMENTS M.A. MORTENSON COMPANY, INC., Petitioner, v. TIMBERLINE SOFTWARE CORPORATION and SOFTWORKS DATA SYSTEMS, INC., Respondents. No. 67796--4 SUPREME COURT OF WASHINGTON 140 Wn.2d 568; 998 P.2d 305; 2000 Wash. LEXIS 287; CCH Prod. Liab. Rep. P15,893; 41 U.C.C. Rep. Serv. 2d (Callaghan) 357 October 26, 1999, Oral Argument Date May 4, 2000, Filed PRIOR HISTORY: [***1] Appeal from Superior Court, King County. 95--2--31991--2. Honorable Phillip Hubbard, Judge. DISPOSITION: Court of Appeals affirmed, upholding trial court's order of summary judgment of dismissal and denial of motions to vacate and amend. LexisNexis(R) Headnotes COUNSEL: For Petitioner: Bradley L. Powell, Oles Morrison Rinker & Baker Llp, Seattle, WA, Catherine C. Clark, Williams & Williams Psc, Kenmore, WA, Theodore Russell, Sheppad Mullin Richter & Hampton Llp, San Francisco, CA. For Respondents: Charles E. Peery, Peery Hiscock Pierson & Ryder, Seattle, WA, Michael E. Ricketts, Peery Hiscock Pierson Kingman & Peabody, Seattle, WA, Laura P. Knechtel, Federal Way, WA, Michael P. Grace, Groff & Murphy Pllc, Seattle, WA. Amicus Curiae on behalf of Business Software Alliance: Robert B. Mitchell Jr., Preston Gates & Ellis, Seattle, WA, Mark Wittow, Preston Gates & Ellis, Seattle, WA. JUDGES: Authored by Charles W. Johnson. Concurring: Richard P. Guy, Charles Z. Smith, Barbara A. Madsen, Philip A. Talmadge, Faith E Ireland, Visiting Judge. Dissenting: Richard B. Sanders, Gerry L. Alexander. Dissent by Sanders, J. OPINIONBY: CHARLES W. JOHNSON OPINION: [*571] [**307] En Banc JOHNSON, J. - - This case presents the issue of whether -a limitation [***2] on consequential damages enclosed in a 'shrinkwrap license' accompanying computer software is enforceable against the purchaser of the licensed software. Petitioner M.A. Mortenson Company, Inc. (Mortenson), a general construction contractor, purchased licensed computer software from Timberline Software Corporation (Timberline) through Softworks Data Systems, Inc. (Softworks), Timberline's local authorized dealer. After Mortenson used the program to prepare a construction bid and discovered the bid was $1.95 million less than it should have been, Mortenson sued Timberline for breach of warranties alleging the software was defective. The trial court granted Timberline's motion for summary judgment. The Court of Appeals affirmed the order of summary judgment, holding (1) the purchase order between the parties was not an integrated contract; (2) the licensing agreement set forth in the software packaging and instruction manuals was part of the contract between Mortenson and Timberline; and (3) the provision limiting Mortenson's damages to recovery of the purchase price was not unconscionable. M.A. Mortenson Co. v. Timberline Software Corp., 93 Wn. App. 819, 826-37, [*572] 970 P.2d 803 (1999). [***3] We granted Mortenson's petition for review and affirm the Court of Appeals. FACTS Petitioner Mortenson is a nationwide construction contractor with its corporate headquarters in Minnesota and numerous regional offices, including a northwest regional office in Bellevue, Washington. Respondent Timberline is a software developer located in Beaverton, Oregon. Respondent Softworks, an authorized dealer for Timberline, is located in Kirkland, Washington and provides computer--related services to contractors such as Mortenson. Since at least 1990, Mortenson has used Timberline's Bid Analysis software to assist with its preparation of bids. n1 Mortenson had used Medallion, an earlier ver-

Page 2 140 Wn.2d 568, *572; 998 P.2d 305, **307; 2000 Wash. LEXIS 287, ***3; CCH Prod. Liab. Rep. P15,893 sion of Bid Analysis, at its Minnesota headquarters and its regional offices. In early 1993, Mortenson installed a new computer network operating system at its Bellevue office and contacted Mark Reich (Reich), president of Softworks, to reinstall Medallion. Reich discovered, however, that the Medallion software was incompatible with...
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