Title: Liberty Truck Sales, Inc. v. Kimbrel

State: alabama

Issuer: Alabama Supreme Court

Document:

548 So. 2d 1379 (1989)
LIBERTY TRUCK SALES, INC.
v.
Lynn KIMBREL.
No. 87-1061.

Supreme Court of Alabama.
June 30, 1989.
Rehearing Denied August 18, 1989.
Bibb Allen and James J. Bushnell, Jr. of Rives & Peterson and John Frawley, Birmingham, for appellant.
E. Ray Large, Birmingham, for appellee.
ADAMS, Justice.
Defendant Liberty Truck Sales, Inc. ("Liberty"), appeals a judgment on a jury verdict in the amount of $80,296 in favor of plaintiff Lynn Kimbrel. As an alternative to reversing, Liberty asks us to apply the remedy of remittitur to this verdict. We affirm conditionally.
The facts necessary to an understanding of this case are as follows:
Kimbrel, a professional truck driver, purchased a new Freightliner truck from Liberty *1380 in November 1981. Associated with the sale of this truck, Kimbrel and Liberty executed a "Retail Installment ContractSecurity Agreement" ("the Contract"), which provides for the following:
1) The total cash purchase price of the truck was $69,500.
2) A down payment of $3,000 was to be made by Kimbrel.
The contract further provided:
The "Manufacturer's Standard Warranty" ("the Warranty") provided for the following:
"Limited Warranty and Warranty Disclaimer
The Warranty further provided:
Certain devices and conditions were excluded from the purview of the Warranty:
"ITEMS EXCLUDED FROM WARRANTY
"Your Warranty Does Not Include These Items:
Kimbrel took possession of the truck on the same day the Contract was executed, and he retained possession of the truck for approximately 45 days. During this period, the truck required service on four separate occasions for factory defects and part malfunctions, which kept the truck out of service approximately 13 days.
Kimbrel filed suit, alleging breach of the manufacturer's standard warranty; he named as defendants Liberty, Freightliner Credit Corporation, and Caterpillar Tractor Corporation. Both Freightliner Credit Corporation and Caterpiller Tractor Corporation were dismissed. During the trial, Kimbrel presented testimony that he had lost approximately $3,500 as a result of the repairs. Kimbrel did not make a payment to Freightliner Credit Corporation during the 45-day period during which he retained possession of the truck, and, consequently, the truck was repossessed while at Liberty for repairs.
Kimbrel testified that he was informed by someone at Liberty that his truck had been repaired and, in response, he and a witnessMr. Merk Blackwent to Liberty, where they inspected the truck and found that the repairs had not been completed. He further testified that he and Mr. Black left Liberty without asking for or receiving any explanation from the employees or officials of Liberty. The truck was repossessed that same day.
Approximately ten days after repossession, Mr. Kimbrel told his psychiatrist, Dr. Stephens, that he was adversely affected by stress caused in part by the repossession of the truck. Kimbrel was hospitalized for a mental condition in 1986, which *1382 he alleges was caused by the repossession of the truck. Dr. Stephens testified that Kimbrel had had a history of mental disease and that it had required hospitalization on several occasions. Dr. Stephens could not testify with any degree of medical certainty that the 1982 truck repossession caused Kimbrel's 1986 hospitalization for his mental condition. Kimbrel, at the time of the trial, was a patient in the psychiatric ward of the Veterans' Administration Hospital in Tuscaloosa, Alabama. Kimbrel's testimony was presented via deposition.
We address two issues in this appeal:
1) Did Liberty adopt the Manufacturer's Standard Warranty?
Liberty takes the position that it did not adopt the warranty contained in the Owner's Warranty Information Book, and contends that the "Limitation of Warranty" section of the contract served only to give notice of an express warranty by the manufacturer and is not an express warranty of Liberty; that section reads as follows:
Liberty refers us to Gilliam v. Indiana National Bank, 337 So. 2d 352 (Ala.Civ.App.1976), in which the Court of Civil Appeals held that a clause in a contract for the sale of a mobile home merely gave notice of the manufacturer's standard warranty and did not indicate adoption of it by the seller. That clause read as follows:
Kimbrel counters by referring us to the "Purchase Agreement and Acknowledgment," in which reference is made to the expiration of the warranty period. He also directs our attention to paragraph 10 of that Purchase Agreement and Acknowledgment, which states:
Finally, Kimbrel directs our attention to the "Limitation of Warranty" section of the "Retail Installment ContractSecurity Agreement," in which the Seller incorporates by reference the Manufacturer's Standard Warranty and further disclaims any implied warranties of merchantability and fitness for a particular purpose and any liability for consequential damages. Kimbrel contends that Liberty did much more than give notice of the Manufacturer's Standard Warrantythat Liberty adopted the warranty through its repeated references to it.
Kimbrel's argument is persuasive on this issue. A review of the exhibits in this case reveals that Liberty refers to the "Manufacturer's Standard Warranty" contained in the "Owner's Warranty Information Book" on no fewer than four occasions in the "Purchase Agreement and Acknowledgment" and the "Retail Installment ContractSecurity Agreement" and that Liberty *1383 specifically incorporates by reference the warranty provisions stated in the "Owner's Warranty Information Book" into the "Purchase Agreement and Acknowledgment". The record reveals that Liberty repaired Kimbrel's truck pursuant to this warranty on three separate occasions. The facts of this case are similar to those of General Motors Corp. v. Earnest, 279 Ala. 299, 184 So. 2d 811 (1966), in which the Court held that an automobile dealer had adopted a General Motors warranty because it had repaired the purchaser's automobile pursuant to that warranty. Furthermore,
77 C.J.S. Sales, § 308 at 1134 (1964). We, therefore, hold that Liberty adopted the Manufacturer's Standard Warranty contained in the Owner's Warranty Information Book.
Turning our attention to the second issue in this case, we hold that the Manufacturer's Standard Warranty, as adopted by Liberty, was honored by Liberty but that it failed of its essential purpose.
Code of Alabama 1975, § 7-2-719, is the applicable statutory authority. It states:
"Contractual modification or limitation of remedy.
The measure of damages in these cases is determined pursuant to Code of Alabama 1975, § 7-2-714, which states:
"Buyer's damages for breach in regard to accepted goods.
"(1) Where the buyer has accepted goods and given notification (subsection (3) of section 7-2-607) he may recover as damages for any nonconformity of tender the loss resulting in the ordinary course of events from the seller's breach as determined in any manner which is reasonable.
Section 7-2-719(2) has been interpreted by this Court to imply two types of circumstances where the warranty either was not honored or failed of its essential purpose. The first actionable circumstance under § 7-2-714(2) concerns the dealer's refusal to honor its own warranty and make the repairs or replacements as stated in the warranty. We addressed this issue in Winchester v. McCulloch Brothers Garage, Inc., 388 So. 2d 927 (Ala.1980). Winchester is a breach of warranty case in which plaintiff purchased a vehicle with a defective leaf spring, which caused the drive shaft to become detached from the chassis of the vehicle. Plaintiff filed suit after the defendant dealership refused to repair the vehicle. Plaintiff received a verdict in the amount of $20,000, which was reduced by the trial judge's order of remittitur of $15,000. Plaintiff appealed. We held, inter alia, that where a dealership has refused to repair a vehicle pursuant to its warranty contract, that warranty has failed of its essential purpose.
The other circumstance in which this Court has stated that a warranty may fail of its essential purpose was announced in Massey-Ferguson, Inc. v. Laird, 432 So. 2d 1259 (Ala.1983), in which plaintiff purchased a combine from defendant. Over the course of two years, plaintiff experienced numerous mechanical problems with the combine. Defendant attempted to repair the machine but its attempts were never to plaintiff's reasonable satisfaction. We held that a seller does not have an unlimited time to effect repairs or to replace parts under a warranty. We further held that a jury could reasonably find that the combine had not been repaired within a reasonable time and that the limited warranty in question had failed of its essential purpose, given the numerous attempts to repair the combine over an extended period of time. In the instant case, we are faced with a situation in which plaintiff retained possession of the truck only 45 days, and during this period the truck required service on four separate occasions. We are aware that the truck remained at Liberty for repairs approximately 13 days in this 45-day period, and that that fact prevented the complete use of the truck for gainful economic purposes and places a financial burden on Kimbrel, who had relied on the income produced with the truck to repay the debt incurred to purchase the truck. Although we are of the opinion that the warranty, under the facts in this case, failed of its essential purpose, we also are of the opinion that the jury verdict of $80,296 is excessive. We affirm the judgment in this case, provided the plaintiff accepts a remittitur of $65,296. If the remittitur is not accepted, then the judgment will be reversed and the cause remanded for a new trial. Plaintiff must notify this Court of his election within 30 days of the date of this opinion.
AFFIRMED CONDITIONALLY.
HORNSBY, C.J., and MADDOX and STEAGALL, JJ., concur.
ALMON, J., concurs in the result.