Title: Massey Ferguson, Inc. v. Stowe

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Massey Ferguson, Inc. v. Stowe1984 WY 96686 P.2d 604Case Number: 83-240Decided: 08/29/1984MASSEY FERGUSON, INC., A MARYLAND CORPORATION, APPELLANT (DEFENDANT), 

v. 

RALPH V. STOWE, APPELLEE (PLAINTIFF).
Supreme Court of Wyoming
MASSEY FERGUSON, INC., A 
MARYLAND CORPORATION, APPELLANT (DEFENDANT), 

v. 

RALPH V. STOWE, APPELLEE 
(PLAINTIFF).

Rehearing Denied 
September 27, 1984.

 
 
Appeal from the District 
Court, FremontCounty, Robert B. Ranck, 
J.

 
 
Joel M. Vincent 
of Hettinger & Leedy, P.C., Riverton, for appellant.

F.M. Andrews, 
Jr., of Andrews & Andrews, P.C., Riverton, for appellee.

Before ROONEY, C.J., and 
THOMAS, ROSE, BROWN and CARDINE, JJ. 

BROWN, 
Justice.

[¶1.]     Ralph V. Stowe, 
appellee, sued Massey Ferguson, Inc., appellant, a Maryland corporation, for 
breach of an implied warranty and breach of an express warranty. The jury 
returned a verdict in favor of Stowe to which Massey Ferguson takes exception. 
We will affirm the verdict with some modification of the damage 
award.

[¶2.]     The issues presented by 
Massey Ferguson are:

"1. Whether the jury's 
verdict in favor of Stowe was supported by the evidence.

"2. Whether the trial 
court should have directed a verdict in appellant's favor or entered a judgment 
notwithstanding the verdict after the return of the verdict in favor of the 
appellee.

"3. Whether there existed 
sufficient evidence as a basis for the jury to find that damages for two crop 
years were within the contemplation of the appellant and appellee at the time of 
the execution of the sale contract concerning the tractor in 
question.

"4. Whether appellee 
properly mitigated his damages.

"5. Whether there was 
sufficient evidence for the jury to determine that amount of damages set forth 
in the verdict returned by the jury."

[¶3.]     Stowe purchased a 
Massey Ferguson 2805 tractor on March 31, 1981, for $66,150. The purchase was 
accomplished by an installment contract. Stowe made a down payment of 
$33,339.45; the balance of $32,810.51 was financed by Massey Ferguson Credit 
Corporation (hereinafter Massey Credit).1 Stowe was advised by Massey 
Ferguson that the tractor carried a two-year warranty or 1,500 hours. Stowe 
missed his first payment due on November 1, 1981. Three weeks later Stowe's son 
was using the tractor and testified that a pin holding the manure spreader to 
the draw bar of the tractor slipped out, allowing the manure spreader to come 
forward and strike the differential housing, which cracked it and caused 
hydraulic fluid to leak out.

[¶4.]     Stowe informed the 
Massey Ferguson dealer, A & I Equipment (hereinafter A & I) of the 
damage to the tractor on November 25, 1981. A mechanic from A & I 
accompanied Stowe to his farm and examined the tractor. Stowe expressed a 
preference that the differential housing be welded if the crack was small. 
Because of the cold weather, the welding could not be accomplished until early 
December. The weld proved to be unsuccessful; the differential housing continued 
to leak.

[¶5.]     Next, the area finance 
manager for Massey Credit, Hubbard, had a conversation with Stowe about his 
delinquent payment. Hubbard was informed of the problem; Stowe indicated that he 
did not want to pay until the tractor was fixed. Hubbard then suggested that 
Stowe contact the Massey service representative, but urged him to make the 
delinquent payment.

[¶6.]     On December 10, 1981, 
the Massey service representative, Brooks, called Stowe to discuss the accident 
and explained that if Massey could not have the housing welded to his 
satisfaction that they would replace it as the damaged part was under warranty. 
Two other attempts to weld the housing failed.

[¶7.]     Hubbard again contacted 
Stowe on February 19, 1982, and requested that Stowe make the payment which was 
now 111 days late. Stowe informed Hubbard that the housing was still leaking and 
that Hubbard might as well take the tractor. Hubbard took possession of the 
tractor and eventually sold it.

[¶8.]     In the meantime, A 
& I went out of business, which left Stowe with no place to repair the 
tractor. Stowe was informed two months after the repossession that he could take 
the tractor to Lingle, at his own expense, for the repairs. Stowe was never 
informed that he could obtain the defective part prepaid and have it installed 
by a Massey-approved mechanic in Riverton, where he lived.

[¶9.]     Stowe testified that he 
suffered financially due to the loss of one of his large tractors in both 1982 
and 1983. He testified that his yield was down because of late planting for lack 
of equipment; that he was forced to hire work done on the farm which he had 
never done before; that he had to borrow a neighbor's tractor on a couple of 
occasions; that he hired custom farming; that he had to rent a tractor for three 
months; and that he could not plant all the ground he intended to plant. Stowe's 
estimated total damages because of the loss of the tractor were $116,231. Stowe 
said that he did not redeem the tractor at the sale because he could not afford 
it and that he did not buy another tractor for the same reason. The jury 
returned a verdict for $102,944 in favor of appellee. Judgment was entered for 
$103,195, which included costs.

[¶10.]  When reviewing cases before us on appeal, 
we accept the evidence of the prevailing party as true. We will not disturb the 
trier of fact's findings unless they are totally in conflict with the great 
weight of evidence. Agar v. Kysar, 
Wyo., 628 P.2d 1350 
(1981).

[¶11.]  The jury's verdict in favor of Stowe is 
supported by substantial evidence. It was well within the province of the jury 
to find that the defective tractor part was covered by the manufacturer's 
warranty. Stowe testified that he was told upon purchasing the tractor that it 
was warranted for two years or 1,500 hours. Brooks, the Massey Ferguson service 
representative, testified that the damaged part was covered by the 
manufacturer's express warranty. The jury could have also found that Massey 
Ferguson, as a manufacturer of agricultural farm tractors, had not delivered a 
tractor to Stowe that was merchantable or fit for the ordinary purpose for which 
the goods are used which would be a breach of an implied warranty. Section 
34-21-231, W.S. 1977.

[¶12.]  Massey Ferguson undertook to fulfill its 
duty, created under warranty, by attempting to repair the tractor sold to Stowe. 
The problem is that the tractor was not repaired before repossession nor was it 
apparent to Stowe that the tractor could or would be repaired until sometime 
after repossession. The tractor was useless to Stowe in the damaged condition 
and he felt it was better not to pay the installment and retain some leverage 
against Massey Ferguson than to pay the installment and not have the tractor 
repaired. Stowe indicated in his testimony that he would not pay the installment 
until the tractor was repaired.

[¶13.]  Appellant argues that it was in the 
process of repairing the tractor; and therefore, there was no breach; that it 
was not aware of the Massey Credit repossession; and that all implied warranties 
were properly excluded pursuant to § 34-21-233(b), W.S. 1977. From the evidence 
produced at trial, it is clear to us that the repairs required to fix Stowe's 
tractor were covered by express warranty; therefore, we will not discuss whether 
or not an implied warranty existed. It is also clear to us that appellant was in 
the process of repairing the tractor. However, appellant had been attempting to 
repair the tractor from November 25, 1981, until repossession and even some 
months later. During this time the efforts of Massey Ferguson to repair the 
tractor and communicate with Stowe were less than diligent. In fact, Massey 
Ferguson was not even aware of the fact that its wholly-owned subsidiary, Massey 
Credit, had repossessed the tractor. Massey Ferguson did not fulfill its duty to 
repair the tractor and is liable for the injury to Stowe, which was proximately, 
and in fact, caused by the defect in the tractor. See White and Summers, Uniform 
Commercial Code, Chapter 9, Warranty, p. 272 (1972).

[¶14.]  Next, we will discuss the damages awarded 
to Stowe. The facts of this case do not squarely fit within any of the formulas 
for damages under the Uniform Commercial Code. The attorneys and court proceeded 
to resolve the damages questions to the best of their abilities considering the 
facts which they had to work with. We would not cite this case as a model on 
proof of damages. We are not convinced that appellee's theory of damages is 
entirely correct, and we also see deficiencies in appellee's proofs. However, no 
objections were made at trial, nor does appellant object here. The instructions 
which were given to the jury in regard to damages were discussed by the court 
and counsel and neither party objected to them. There was no objection to the 
instructions at any time in this litigation nor were they argued against when 
appellant made a motion for a directed verdict or motion for judgment not 
withstanding the verdict. Even in appellant's appeal to this court there is no 
mention of improper instructions on the issue of damages; appellant has 
consistently argued against the jury's finding of liability. We cannot say as a 
matter of law that the instructions given were erroneous. Therefore, we accept 
the instructions given as the law of this case and will discuss damages in 
relationship to such instructions.

[¶15.]  Section 34-21-293, W.S. 1977, was given 
to the jury as Instruction No. 12 and is the principal uniform commercial code 
section which governs the right of a buyer who has accepted nonconforming goods 
and neither rejected them nor revoked acceptance of them. See White and Summers, 
supra, Chapter 10, Damages for Breach of Warranty, p. 306. Section 34-21-293, 
states:

"(b) The measure of 
damages for breach of warranty is the difference at the time and place of 
acceptance between the value of the goods accepted and the value they would have 
had if they had been as warranted, unless special circumstances show proximate 
damages of a different amount.

"(c) In a proper case any 
incidental and consequential damages under the next section [§ 34-21-294] may 
also be recovered."

Section 
34-21-294, W.S. 1977, states:

"(a) Incidental damages 
resulting from the seller's breach include expenses reasonably incurred in 
inspection, receipt, transportation and care and custody of goods rightfully 
rejected, any commercially reasonable charges, expenses or commissions in 
connection with effecting cover and any other reasonable expense incident to the 
delay or other breach.

"(b) Consequential 
damages resulting from the seller's breach include:

"(i) Any loss resulting 
from general or particular requirements and needs of which the seller at the 
time of contracting had reason to know and which could not reasonably be 
prevented by cover or otherwise; and

"(ii) Injury to person or 
property proximately resulting from any breach of 
warranty."

[¶16.]  Upon careful review of the record we find 
that the damages awarded by the jury include all of the damages claimed by 
appellee and are supported by evidence contained in the record with two 
exceptions. First, there is no evidence in the record to support or justify the 
recovery by Stowe of the full purchase price of the tractor. Stowe paid 
$33,339.45 for the tractor, leaving a balance due of $32,810.51. The primary 
objective of damages is to compensate for loss; therefore, Stowe is entitled to 
recover the amount he paid for the tractor together with other incidental and 
consequential damages he incurred as a result of the breach by appellant. We 
will reduce the amount awarded by $32,810.51.

[¶17.]  The second exception is that Stowe 
notified Massey Ferguson of the damage to his tractor on November 25, 1981, and 
the tractor was repossessed on or about February 19, 1982. We think it is 
reasonable to award Stowe the damages he incurred in 1982; however, the damages 
which accrued in 1983 of $10,703.50 are not reasonable. 

[¶18.]  Stowe claims that he did not pursue the 
purchase of a new tractor or attempt to redeem the old one because he was not 
financially able to do so. Lack of sufficient funds to minimize damages caused 
by the breach can be an excuse for failure to mitigate. R.E.B., Inc. v. Ralston Purina Co., 525 F.2d 749 (10th Cir. 1975). However, we cannot allow the damages caused by the 
breach to continue indefinitely. One year of damages is a reasonable award under 
the circumstances of the case.

[¶19.]  Stowe is entitled to recover the amount 
found by the jury plus the costs that the trial court awarded minus the unpaid 
portion of the tractor and the damages incurred in 1983. Stowe's total damages 
are $59,680.99.

1 Massey Ferguson Credit 
Corporation is a wholly-owned subsidiary of Massey Ferguson, Inc., although the 
parties here in their dealings did not always recognize two separate entities.