Title: Hubbard v. Dresser, Inc.

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  All the Justices 
 
BENJAMIN L. HUBBARD, SR. 
 
OPINION BY 
v.  Record No. 050544 
JUSTICE LAWRENCE L. KOONTZ, JR. 
 
January 13, 2006 
DRESSER, INC. 
 
 
FROM THE CIRCUIT COURT OF ALLEGHANY COUNTY 
Humes J. Franklin, Jr., Judge 
 
In this appeal, we consider whether the trial court 
properly sustained a demurrer to an amended motion for judgment 
alleging breaches of express and implied warranties in 
connection with the sale of certain petroleum dispensing 
equipment. 
Our consideration of the issue presented is guided by well-
established principles of appellate review.  “A demurrer tests 
the legal sufficiency of facts alleged in pleadings, not the 
strength of proof.  We accept as true all facts properly pleaded 
in the bill of complaint and all reasonable and fair inferences 
that may be drawn from those facts.”  Glazebrook v. Board of 
Supervisors of Spotsylvania County, 266 Va. 550, 554, 587 S.E.2d 
589, 591 (2003) (citations omitted).  Moreover, “when a circuit 
court sustains a demurrer to an amended motion for judgment 
which does not incorporate or refer to any of the allegations 
that were set forth in a prior motion for judgment, we will 
consider only the allegations contained in the amended pleading 
 
2
to which the demurrer was sustained.”  Yuzefovsky v. St. John’s 
Wood Apartments, 261 Va. 97, 102, 540 S.E.2d 134, 136 (2001); 
see also Doe v. Zwelling, 270 Va. 594, 596, 620 S.E.2d 750, 751 
(2005); Fuste v. Riverside Healthcare Ass’n., 265 Va. 127, 129-
30, 575 S.E.2d 858, 860 (2003). 
BACKGROUND 
On March 1, 2004, Benjamin L. Hubbard, Sr., who operates a 
retail gasoline service station in Covington, Virginia under the 
fictious name of Hubbard’s Service, filed an amended motion for 
judgment in the Circuit Court of Alleghany County against Jones 
& Frank Corporation and Dresser, Inc.  In this pleading Hubbard 
alleged that Jones & Frank sells, installs and services 
petroleum dispensing equipment, and that Dresser manufactures 
and sells petroleum dispensing equipment for use by customers 
such as Hubbard, “and does so through representatives, including 
Jones & Frank.”  Hubbard alleged that in 2001, he contracted 
with Jones & Frank for the installation of two diesel fuel pumps 
at Hubbard’s Service to replace two fuel pumps that had been 
destroyed in an accident.  Hubbard alleged that prior to 
entering into the contract, Jones & Frank was “informed . . . 
that Hubbard wished to replace the destroyed fuel pumps with 
exactly what had been destroyed, namely two independently 
operated diesel fuel dispensers.”  Hubbard further alleged that 
“Jones & Frank represented to Hubbard that the fuel dispensing 
 
3
equipment it proposed to sell him was identical to the pumps 
that had been destroyed.”  The cost for the purchase and 
installation of the pumps under the contract was $49,469.00. 
The pumps installed by Jones & Frank included a Wayne Model 
HS1/V387P1 unit manufactured by Dresser, which is “referred to 
as a ‘Master to Satellite Systems’” pump (the Dresser pump).  
Hubbard alleged that “the Dresser diesel fuel dispensing 
equipment . . . consisted of experimental units . . . made up of 
two diesel pumps controlled by one unit, rather than two 
independently operated units, as promised.”  Hubbard further 
alleged that “[w]ithin days” following completion of the 
installation of the Dresser pump in October 2001, “the equipment 
manufactured by Dresser and sold by Jones & Frank began to 
malfunction, including being loud and failing to register 
accurately the amount of fuel being dispensed.” 
Hubbard alleged that “[k]nowing the equipment it sold 
Hubbard never operated properly, Jones & Frank orally extended 
its contractual installation warranty against defects in 
workmanship for [one] year.”  Because the fuel pump “never 
operated properly,” Hubbard “revoked his acceptance of the 
equipment” on December 17, 2002. 
Relevant to the issues raised in this appeal, Hubbard made 
claims against Dresser for breach of an express warranty and 
 
4
breach of an implied warranty of merchantability.1  With respect 
to the express warranty claim, Hubbard alleged that “[w]hen 
Dresser supplied to Jones & Frank and Jones & Frank sold to 
Hubbard the diesel fuel dispensing equipment . . . they 
expressly warranted that the equipment would be free of defects 
in design, workmanship and material” and that the equipment 
delivered had not been free of such defects.  Similarly, Hubbard 
alleged Dresser was subject to an implied warranty of 
merchantability to supply equipment free from defects in design, 
workmanship and material.  Hubbard sought damages of $250,000 
from Dresser for these alleged warranty breaches. 
Dresser filed a demurrer to Hubbard’s amended motion for 
judgment.  Dresser contended therein that Hubbard’s claim for 
breach of an express warranty was “deficient as it pertains to 
Defendant Dresser because it states conclusions of law only 
without pleading any facts to support the legal conclusion.”  
Dresser further contended that “express warranties do not run 
with particular goods and are restricted to the parties subject 
to the agreement such warranty was designed to effectuate” and 
                     
1 The amended motion for judgment also included claims for 
breach of contract and fraud against Jones & Frank, and “breach 
of warranty for the fitness of purpose” against Jones & Frank 
and Dresser.  The trial court’s sustaining of a demurrer to 
these claims is not at issue here, and Jones & Frank is not a 
party to this appeal. 
 
 
5
that Hubbard “does not have nor claims to have privity with 
Defendant Dresser.” 
With respect to the claim for breach of the implied 
warranty of merchantability, Dresser contended that the amended 
motion for judgment failed to make clear whether the alleged 
breach had been caused by Dresser or by Jones & Frank.  Dresser 
further contended that “the legal standard for alleging that a 
manufacturer is in breach of the implied warranty of 
merchantability is that the goods were somehow defective when 
they left the manufacturer’s possession.”  Dresser contended 
that Hubbard had failed to make such an allegation and, thus, 
the pleading was factually insufficient to state a claim for 
breach of an implied warranty. 
Hubbard filed a memorandum brief opposing Dresser’s 
demurrer.  Hubbard contended that he did not need to allege 
privity with Dresser because he sought to recover for direct, 
not consequential, economic losses for which privity was not 
required.  Hubbard further contended that his allegation that 
“the fuel pumps Dresser manufactured malfunctioned soon after 
installation was complete,” was sufficient to allege a breach of 
the express and implied warranties. 
Following oral argument by the parties, the trial court 
issued an opinion letter dated November 15, 2004 stating its 
rationale for sustaining Dresser’s demurrer.  With respect to 
 
6
the claim for breach of an express warranty, the trial court 
concluded that Hubbard had failed to allege “why the fuel pump 
did not work, specifically that there were defects in the fuel 
pump, or that Dresser expressly warranted that the equipment 
would be free of defects in design, workmanship and material.”  
In the absence of a specific allegation of the nature of the 
defect, the trial court ruled that “Hubbard ha[d] not stated a 
claim upon which relief can be granted.”  Similarly, the trial 
court ruled that the absence of an express allegation of “any 
specific facts on why the fuel pump did not work properly,” 
barred Hubbard’s claim of a breach of the implied warranty of 
merchantability.2 
In a final order dated December 15, 2004, the trial court 
sustained Dresser’s demurrer and dismissed Hubbard’s amended 
motion for judgment with prejudice, adopting by reference the 
reasons stated in its November 15, 2004 opinion letter.  Hubbard 
excepted to this judgment and expressly noted his objection in 
endorsing the final order. 
                     
2 The trial court did not expressly address Dresser’s 
assertion that Hubbard was required to allege privity with 
Dresser or Hubbard’s response that privity was not required to 
be alleged because he sought to recover only direct damages.  
Dresser did not assign cross-error to the trial court’s failure 
to rule on these points and in briefing this appeal did not 
raise the issues of the failure to plead privity or whether the 
damages Hubbard seeks are direct or consequential.  Accordingly, 
we express no opinion on those issues. 
 
7
DISCUSSION 
“Because appellate review of the sustaining of a demurrer 
involves a matter of law, we review the trial court’s judgment 
de novo.”  Glazebrook, 266 Va. at 554, 587 S.E.2d at 591.  In 
doing so, we are required to address the same issue that the 
trial court addressed, namely whether the amended motion for 
judgment alleged sufficient facts to constitute a foundation in 
law for the judgment sought, and not merely conclusions of law.  
See Moore v. Jefferson Hospital, Inc., 208 Va. 438, 440, 158 
S.E.2d 124, 126 (1967).  To survive a challenge by demurrer, a 
pleading must be made with “sufficient definiteness to enable 
the court to find the existence of a legal basis for its 
judgment.  In other words, despite the liberality of 
presentation which the court will indulge, the motion must state 
a cause of action.”  Id. (internal quotation marks and citations 
omitted). 
Hubbard contends that the trial court erred in sustaining 
the demurrer with respect to his claim for breach of an express 
warranty because the amended motion for judgment stated that 
Dresser “expressly warranted” that the diesel fuel dispensing 
equipment it supplied to Jones & Frank would be “free of defects 
in design, workmanship and material,” and that the fuel pump 
malfunctioned “[w]ithin days” and “never operated properly.”  
Dresser responds that Hubbard’s amended motion for judgment 
 
8
failed to state a cause of action for breach of an express 
warranty because it alleged no facts to support the existence of 
an express warranty and “makes only conclusory allegations that 
the pump was somehow defective in design or manufacture.” 
Dresser relies principally upon Pulte Home Corp. v. Parex, 
Inc., 265 Va. 518, 523-24, 579 S.E.2d 188, 190 (2003), to 
support its contention that the allegations in Hubbard’s amended 
motion for judgment amounted to no more than a legal conclusion 
and lacked sufficient facts to state a claim for breach of an 
express warranty.  This reliance is misplaced.  In Pulte Home, 
the claim for breach of an express warranty was premised upon an 
assertion that an express warranty arose “by way of affirmations 
of fact, promises, descriptions, and/or use of samples and or 
models regarding the appearance, durability, and/or 
water-resistance” of a certain synthetic stucco product.  Id. at 
522, 579 S.E.2d at 190.  The trial court sustained a demurrer to 
this claim after the party asserting it was unable to produce 
any contract or agreement or any express warranty forming the 
basis of the express warranty claim.  In this context, we held 
that the pleading contained an “allegation [that] merely 
parroted the language of Code § 8.2-313, which sets forth 
several legal bases for the creation of express warranties, and 
amounted to no more than a legal conclusion.”  Id. at 523, 579 
S.E.2d at 190.  Accordingly, we further held that the pleading 
 
9
was insufficient to state a claim for breach of an express 
warranty.  Id. 
Here, unlike the pleading in Pulte Home, Hubbard’s pleading 
alleged an express warranty by Dresser, rather than merely 
stating the legal bases upon which such a warranty might have 
been created.  Hubbard also pled a breach of that express 
warranty because the failure of the diesel fuel dispensing 
system to register accurately the amount of fuel being dispensed 
can reasonably be inferred to have resulted from some flaw in 
the design, workmanship or material in the Dresser pump that was 
the integral part of that system.  The ultimate strength of 
Hubbard’s proof of that claim is not at issue in this appeal. 
The allegations of Hubbard’s amended motion for judgment, 
however, are sufficient to survive a challenge by demurrer.  
Accordingly, we hold that the trial court erred in sustaining 
Dresser’s demurrer to Hubbard’s claim of breach of an express 
warranty. 
With respect to Hubbard’s claim that Dresser breached the 
implied warranty of merchantability, Dresser contends that 
Hubbard was required to plead the nature of the defect alleged 
to have caused the breach, as well as establish the applicable 
standard of merchantability in the industry.  Dresser contends 
that Hubbard did not allege, in his amended motion for judgment, 
 
10
sufficient facts to identify either the nature of the defect or 
the industry standard that was breached.  We disagree. 
Dresser is correct that “[i]n order to prove that a product 
is not merchantable, the complaining party must first establish 
the standard of merchantability in the trade.”  Bayliner Marine 
Corp. v. Crow, 257 Va. 121, 128, 509 S.E.2d 499, 503 (1999).  
However, we note that in Bayliner Marine we were addressing the 
evidentiary burden of the complaining party to successfully 
maintain an action for breach of implied warranty at trial.  Id. 
at 125-26, 509 S.E.2d at 501-02.  We did not hold in that case 
that it was necessary for the complaining party to plead with 
specificity the trade or industry standard for merchantability, 
and we decline Dresser’s implicit invitation that we do so here. 
Code § 8.2-314 provides that “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.”  
In part, the statute further defines “merchantable goods” as 
being of a quality that would “pass without objection in the 
trade under the contract description” or which “are fit for the 
ordinary purposes for which such goods are used.”   
In the amended motion for judgment, Hubbard alleged that 
Dresser was a manufacturer of “petroleum dispensing equipment 
for use by customers such as Hubbard, and does so through 
representatives, including Jones & Frank.”  Hubbard alleged that 
 
11
from its installation, the pump “fail[ed] to register accurately 
the amount of fuel being dispensed” and that this failure was 
due to a defect in the design, workmanship or material of the 
pump supplied by Dresser. 
Reason and common sense dictate that a pump manufactured 
for the purpose of dispensing petroleum products in a retail 
setting would of necessity be required to accurately register 
the amount of fuel being dispensed.  And, it further follows 
that a pump manufactured for that purpose that failed to 
properly register the amount of fuel being dispensed would not 
“pass without objection in the trade” as it is not “fit for the 
ordinary purposes for which such goods are used.”  Thus, while 
Hubbard will have the burden of proving these allegations at 
trial and that the alleged failure of the pump to perform was 
due to a defect caused by Dresser, the allegations themselves 
are clearly adequate to state a claim for breach of the implied 
warranty of merchantability provided by Code § 8.2-314.  
Accordingly, we hold that the trial court erred in sustaining 
Dresser’s demurrer to Hubbard’s claim for breach of the implied 
warranty of merchantability. 
CONCLUSION 
For these reasons, we will reverse the judgment of the 
trial court sustaining Dresser’s demurrer to the claims of 
breach of an express warranty and breach of the implied warranty 
 
12
of merchantability, and the case will be remanded to the trial 
court for further proceedings consistent with the views 
expressed in this opinion. 
Reversed and remanded.