Case Name: FRANK GRIFFIN VOLKSWAGEN, INC., a Florida corporation, Appellant/Cross Appellee, v. Jerry T. SMITH, Appellee/Cross Appellant
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1992-12-11
Citations: 610 So. 2d 597
Docket Number: No. 90-979
Parties: FRANK GRIFFIN VOLKSWAGEN, INC., a Florida corporation, Appellant/Cross Appellee, v. Jerry T. SMITH, Appellee/Cross Appellant.
Judges: WOLF, J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 610
Pages: 597–616

Head Matter:
FRANK GRIFFIN VOLKSWAGEN, INC., a Florida corporation, Appellant/Cross Appellee, v. Jerry T. SMITH, Appellee/Cross Appellant.
No. 90-979.
District Court of Appeal of Florida, First District.
Dec. 11, 1992.
Rehearing Denied Jan. 22, 1993.
J. Michael Lindell of Hayes & Lindell, P.A., Jacksonville, for appellant.
William H. Folsom, Jr., of William H. Folsom, Jr., P.A., Jacksonville, for appellee.

Opinion:
ALLEN, Judge.
The appellant, Frank Griffin Volkswagen, Inc. (Griffin), and the appellee, Jerry T. Smith (Smith), were respectively the seller and buyer of a Volkswagen automobile. Following several unsuccessful efforts to correct mechanical problems with the automobile, Smith filed suit against Griffin and others. The parties challenge various rulings of the trial court during the course of the lawsuit. We affirm each of the rulings except the denial of Griffin's motion for a directed verdict on the count alleging Smith's right to revoke his acceptance under section 672.608, Florida Statutes (1987).
On September 2, 1987, Smith bought a new 1987 Volkswagen automobile from Griffin, an authorized Volkswagen dealer. At the time of purchase, Smith received and signed various documents indicating that Griffin was selling the automobile "as is" and that Griffin was disclaiming all warranties, express or implied, including the warranty of merchantability. The documents clearly indicated that the only warranties on the automobile were those of the manufacturer. Griffin's salesman gave Smith a warranty booklet identifying the warrantor as Volkswagen, and indicating that warranty service was available from any authorized Volkswagen dealer in the United States. The salesman also accurately told Smith that warranty service was available at any Volkswagen dealership. The relevant testimony from Smith was as follows:
Q. Now, concerning the . warranty booklet . [,] were you tendered that with respect to the purchase of this vehicle?
A. Yes, sir, I was.
Q. And who gave you that document?
A. The salesman, I believe.
Q. All right. Now, concerning the performance of the warranty, were there any conferences you had with the salesman concerning who would perform that warranty?
A. Yes, sir. They said any authorized Volkswagen dealer could perform warranty work on the car.
Q. And did they indicate to you what you should do if you had any problems with the vehicle within that warranty period?
A. Yes, sir. They said . take it to any Volkswagen — authorized Volkswagen dealer and they would correct the problem.
Several weeks later, Smith began to experience mechanical problems with the automobile. He took it first to another Volks wagen dealer and then to Griffin for repairs. Each time Smith took the automobile to Griffin, a Griffin employee would prepare a written repair order specifying the problem and the repair work completed. On each repair order, Griffin disclaimed all warranties, express or implied, on the products sold under the repair order and gave notice that any warranty on said products, came from the manufacturer. Each repair order also contained the following statement: "We guarantee our service work for 6 mohths [sic] or 6000 miles, whichever comes first."
After numerous repair efforts proved unsuccessful, Smith filed suit against Griffin, Volkswagen, and others. The suit resulted in a jury verdict against Volkswagen for breach of Volkswagen's warranties, and against Griffin on various theories, including revocation of acceptance pursuant to section 672.608, Florida Statutes.
Griffin argues that the trial court erred in denying its motion for a directed verdict on the count alleging Smith's right to revoke his acceptance. Section 672.608(1) provides:
The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it:
(a) On the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or
(b) Without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances.
(Emphasis supplied). The first requirement for application of this section is that the goods be "nonconforming." Goods are conforming when they are in accordance with the obligations under the contract. § 672.106(2), Fla.Stat. Griffin's argument is that, because it disclaimed all warranties, it incurred no contractual obligations to Smith which could serve as a basis for his revocation of acceptance. Griffin relies upon cases such as McCormick Machinery, Inc. v. Julian E. Johnson & Sons, Inc., 523 So.2d 651, 656 (Fla. 1st DCA 1988); Konicki v. Salvaco, Inc., 16 Ohio App.3d 40, 474 N.E.2d 347 (1984); Crume v. Ford Motor Co., 60 Or.App. 224, 653 P.2d 564 (1982); and Clark v. Ford Motor Co., 46 Or.App. 521, 612 P.2d 316 (1980), for the proposition that an effective disclaimer of all warranties eliminates any claim that goods are nonconforming, and thereby precludes revocation of acceptance. See also, 1 J. White & R. Summers, Uniform Commercial Code, § 8-4, at 417 (3d ed. 1988). In response to this argument, Smith offers a series of arguments to support his entitlement to revoke his acceptance of the automobile.
First, Smith contends that when Griffin's salesman advised him that warranty service was available at any authorized Volkswagen dealership, Griffin thereby incurred a contractual obligation to successfully repair any defects covered under the Volkswagen warranty. We reject this argument. While oral representations will sometimes create contractual obligations, Seekings v. Jimmy GMC of Tucson, Inc., 130 Ariz. 596, 638 P.2d 210 (1981), the salesman's representations here provide no basis for obligating Griffin under the manufacturer's warranty. The salesman's statements can only be interpreted as an explanation of the manufacturer's warranty. Where a dealer has properly disclaimed all warranties, the delivering, presenting, or explaining of a manufacturer's warranty, without more, does not render the dealer a co-warrantor by adoption, Motor Homes of America, Inc. v. O'Donnell, 440 So.2d 422, 427 (Fla. 4th DCA 1983), rev. denied, 451 So.2d 849 (Fla.1984), nor does it create a contractual obligation which can serve as a basis for a buyer's later revocation of acceptance. Should we hold otherwise, an automobile dealer would effectively be precluded from disclaiming responsibility for the warranties of the manufacturer, despite the fact that section 672.316, Florida Statutes, authorizes a dealer to do so.
We are also unpersuaded by Smith's contention that Griffin adopted Volkswagen's warranty as a result of certain language in the dealer agreement existing between Volkswagen and Griffin. The agreement, admitted into evidence below, obligates Griffin to "make the text of the VW/US Warranties part of its contracts for sale of Authorized Products," and "comply with the provisions of the Volkswagen Dealer Warranty Manual," the warranty booklet given to Smith at the time of purchase which explained Volkswagen's limited warranty and promised that said warranty would be honored by any authorized Volkswagen dealer in the United States. We acknowledge that in Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960); Ventura v. Ford Motor Corp., 180 N.J.Super. 45, 433 A.2d 801 (1981); Freeman v. Hubco Leasing, Inc., 253 Ga. 698, 324 S.E.2d 462 (1985); General Motors Acceptance Corp. v. Jankowitz, 216 N.J.Super. 313, 523 A.2d 695 (1987); and Felde v. Chrysler Credit Corp., 219 Ill.App.3d 530, 162 Ill.Dec. 565, 580 N.E.2d 191 (1991), appeal denied, 143 Ill.2d 637, 167 Ill.Dec. 398, 587 N.E.2d 1013 (1992), the courts determined that despite the dealers' attempts to disclaim all warranties, they had nevertheless adopted the automobile manufacturers' warranties and were liable thereunder to the disappointed buyers. In each of those cases, however, there was language in the dealer's sales contract with the buyer which reflected the dealer's intent to incorporate, by reference, the manufacturer's warranty.
In Henningsen, for example, the dealer disclaimed all warranties in the purchase contract, but in the same document "agree[d] to promptly perform and fulfill all terms and conditions of the owner service policy." The owner service policy, given to the buyer at the time of delivery of the automobile, repeated the manufacturer's warranty set out in the purchase contract and added a paragraph by which the dealer extended that warranty to the buyer in the same manner as if the word "Dealer" appeared in place of the word "Manufacturer." The court concluded that the dealer's intent was to incorporate the provisions of the owner service policy into the purchase contract. It went on to hold that because the disclaimer in the purchase contract was inconspicuous and the limited remedy afforded by the manufacturer was unconscionable, both the disclaimer and the manufacturer's limited remedy were void as against public policy. Henningsen, 161 A.2d at 96-97. Similarly, in Ventura, the dealer disclaimed all warranties in its sales contract but, at the same time, agreed "to promptly perform and fulfill all terms and conditions of the owner service policy." The court concluded that, even assuming that the dealer's disclaimer was conspicuous and not unconscionable, the dealer's reference in the sales contract to the manufacturer's warranty amounted to the dealer's "written warranty" under the Magnu-son-Moss Warranty — Federal Trade Commission Improvement Act, sections 2301 to 2312, Title 15, United States Code Annotated (West 1982). Ventura, 433 A.2d at 809. Because the dealer had extended a written warranty within the meaning of that act, its attempted disclaimer of the implied warranty of merchantability was ineffective. 15 U.S.C.A. § 2308(a)(1). In Freeman, the dealer was found to have adopted the manufacturer's warranty because, at the time of purchase, the dealer made the buyer aware of its own agreement with the manufacturer to provide, free of charge, all service covered by that warranty. Freeman, 324 S.E.2d at 466-67. In Jankowitz, the dealer was found to have extended a written warranty to the buyer which nullified its attempted warranty disclaimer. The dealer's sale contract declared its intent to disclaim all warranties, but then indicated that the dealer might extend the buyer's written warranty within ninety days of the sale contract and, if it did, any implied warranty would last only as long as the written warranty. Because the only written warranty which had been given to the buyer was that of the manufacturer, the court concluded that the reference to that warranty in the sale contract amounted to the dealer's adoption of that warranty under the Magnuson-Moss Act. Jankowitz, 523 A.2d at 700-02. Finally, in Felde, the dealer was found to have adopted the manufacturer's warranty because its invoice given to the buyer at the time of purchase explained that the only warranty covering the automobile was that of the manufactur er, which warranty is incorporated herein and made a part hereof." Felde, 162 Ill. Dec. at 571, 580 N.E.2d at 197. See also, Rothe v. Maloney Cadillac, Inc., 142 Ill. App.3d 937, 97 Ill.Dec. 61, 67, 492 N.E.2d 497, 503 (1986) (explaining Ventura and Freeman), affd in part, rev'd in part on other grounds, 119 I11.2d 288, 116 Ill.Dec. 207, 518 N.E.2d 1028 (1988).
By contrast, the retail buyer's order and installment contract signed by Smith contain no language from which we can infer that the dealer intended to incorporate by reference the provisions of Volkswagen's warranty. Although Griffin's dealer agreement with Volkswagen obligates Griffin to make Volkswagen's warranty "part of its contracts for sale" of Volkswagen products, there is no indication in the record that Smith was made aware of the provisions of the dealer agreement at the time of the sale, or indeed, at any time prior to suit. Even if Smith had been furnished a copy of Griffin's dealer agreement at the time of sale, we do not construe that agreement to require Griffin to adopt Volkswagen's warranties as its own. The dealer's promise to make Volkswagen's warranty part of its sale contract would seem to be satisfied by the dealer's transmission of the warranty booklet to the buyer upon delivery of the automobile, and its promise to comply with the provisions of Volkswagen's warranty would seem to be satisfied by its performance of warranty service work. In sum, we can find no indication that Griffin became Volkswagen's co-warrantor by adoption. See Norman Gershman's Things to Wear, Inc. v. Mercedes-Benz of N. Am., Inc., 558 A.2d 1066, 1073 (Del.Super.Ct.1989) (the dealer's delivery of the manufacturer's warranty to the buyer, which warranty said that "any authorized Mercedes-Benz dealer" would make necessary warranty repairs was not an undertaking on the part of the dealer to repair the product); and Lytle v. Roto Lincoln Mercury & Subaru, Inc., 167 Ill.App.3d 508, 118 Ill.Dec. 133, 137, 521 N.E.2d 201, 205 (1988) (where the dealer "issued" the manufacturer's warranty to the buyer, but took no other steps that could be construed as an adoption of that warranty, it did not adopt the manufacturer's warranty within the meaning of the Magnuson-Moss Act); and cf. Simmons v. Taylor Childre Chevrolet-Pontiac, Inc., 629 F.Supp. 1030, 1032 (M.D.Ga.1986) ("Nothing in the seller's invoice, the only writing [the dealer] itself extended to plaintiff, comes within the Magnuson-Moss definition of 'written warranty.' ").
Next, Smith argues that the salesman's statement that warranty service was available at any authorized Volkswagen dealer was a part of an unfair trade practice under Chapter 501, Florida Statutes, which was completed when Griffin subsequently failed to repair the automobile. Smith contends that Gardner v. Nimnicht Chevrolet Co., 532 So.2d 26 (Fla. 1st DCA1988), stands for the broad proposition that a violation of Chapter 501 is a sufficient basis for revocation of acceptance. Because we do not believe the Gardner opinion sets forth sufficient facts for its holding to be so interpreted, and because, as we have previously said, the salesman's statements did not cause Griffin to incur any contractual obligation, we also reject this argument.
Smith further argues that Griffin's disclaimer of all warranties effectively created an exclusive remedy, Volkswagen's limited warranty. The argument continues that, when the remedy failed of its essential purpose due to Griffin's inability to repair the car, Smith became entitled to invoke all remedies provided in the Uniform Commercial Code. Section 672.719, Florida Statutes, authorizes the parties to a contract to provide for remedies in addition to, or in substitution for, those remedies provided in the UCC. Subsection 2 provides, "Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this code." Relying upon Parsons v. Motor Homes of America, Inc., 465 So.2d 1285 (Fla. 1st DCA1985), and Tampa Farm Svc., Inc. v. Cargill, Inc., 356 So.2d 347 (Fla. 2d DCA 1978), Smith contends that he can pursue other UCC remedies, including revocation of acceptance, against Griffin. We reject this argument for two reasons. First, Griffin disclaimed all warranties, express or implied, and the only remedy available to Smith was that of the manufacturer, not Griffin. "If the limited remedy provided by the manufacturer failed of its essential purpose, that does not render the goods nonconforming under [the consumer's] contract with the dealer, absent a warranty of merchantability." Crume, 653 P.2d at 567 (emphasis added); see also, 1 J. White & R. Summers, supra, at 599; and Agristor Credit Corp. v. Schmidlin, 601 F.Supp. 1307, 1315-16 (D.Or.1985) (no claim arising out of the alleged failure of the buyer's exclusive contractual remedy may be asserted against the seller where the limited remedy provided was made only by the manufacturer). Parsons and Cargill do not support the application of UCC remedies against a party who, like Griffin, has adequately disclaimed all warranties. Secondly, we agree with Griffin's contention that the jury in this case never found that the remedy provided by Volkswagen failed of its essential purpose, though that determination may well be one for the jury. See, Riley v. Ford Motor Co., 442 F.2d 670, 673 (5th Cir.1971); and Caterpillar Tractor Co. v. Waterson, 13 Ark.App. 77, 679 S.W.2d 814, 820 (1984).
Finally, Smith argues that Griffin's disclaimer of the implied warranty of merchantability is ineffective by virtue of section 2308 of the Magnuson-Moss Act. That section provides in relevant part:
(a) No supplier may disclaim or modify . any implied warranty to a consumer with respect to such consumer product if . at the time of sale, or within 90 days thereafter, such supplier enters into a service contract with the consumer which applies to such consumer product.
(c) A disclaimer, modification, or limitation made in violation of this section shall be ineffective for purposes of this chapter and State law.
15 U.S.C.A. § 2308(a)(2) & (c). According to Smith, Griffin entered into a service contract with him within ninety days of his purchase of the automobile. For this argument, he relies upon repair orders prepared by Griffin employees when he took his automobile to the dealer for warranty work. We note that only one of the repair orders, the one dated November 27, 1987, was prepared within ninety days of the date of sale. Because it appears that Griffin qualifies as a supplier under the act, see 15 U.S.C.A. § 2301(4), Smith is a "consumer," see 15 U.S.C.A. § 2301(3) and the automobile he purchased is a "consumer product," 15 U.S.C.A. § 2301(1), our inquiry focuses upon whether the referenced repair order constitutes a service contract. With respect to that repair order, Smith directs our attention to Griffin's statement, "We guarantee our service work for 6 [months] or 6000 miles, whichever comes first."
Section 2301(8) of the act defines a service contract as "a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair (or both) of a consumer product. 15 U.S.C.A. § 2301(8). The Federal Trade Commission, vested with rule-making authority under various provisions of the act, expounded upon the definition of service contract in section 700.11, Title 16, Code of Federal Regulations (1992). That rule provides in relevant part:
A service contract under the Act must meet the definitions of [15 U.S.C.A. § 2301(8) ]. An agreement which would meet the definition of written warranty in section [2301(6)(A) or (B)] but for its failure to satisfy the basis of the bargain test is a service contract. For example, an agreement which calls for some consideration in addition to the purchase price of the consumer product, or which is entered into at some date after the purchase of the consumer product to which it applies, is a service contract. An agreement which relates only to the performance of maintenance and/or inspection services and which is not an undertaking, promise, or affirmation with respect to a specified level of performance, or that the product is free of defects in materials or workmanship, is a service contract. An agreement to perform periodic cleaning and inspection of a product over a specified period of time, even when offered at the time of sale and without charge to the consumer, is an example of such a service contract.
16 C.F.R. § 700.11(c). Notably, the Commission acknowledges in the first sentence of its rule that a service contract must meet the definition set out in section 2301(8) of the act. The examples given in the rule are, therefore, not to be taken as an indication that a contract which fails to meet all of section 2301(8)'s requirements will nevertheless qualify as a service contract under the act.
To be sure, Griffin's repair order is not an ordinary service contract like the extended warranty discussed in Parsons, 465 So.2d at 1293, the "extended service contract" referenced in Auburn Ford, Lincoln Mercury, Inc. v. Norred, 541 So.2d 1077, 1080 (Ala.1989), or the service contract outlined in Patton v. McHone, 822 S.W.2d 608, 617 (Tenn.Ct.App.1991). Though we are mindful of the Commission's sweeping examples and the deference which must be shown to its comments, we remain unable to conclude that Griffin's 6-month or 6000 mile guarantee of the service work identified on the repair order constitutes a contract to "perform, over a fixed period of time . services relating to the maintenance or repair (or both) of [Smith's automobile]." In sum, we do not believe that the term "service contract" encompasses those situations where a supplier merely guarantees his repair work on an isolated post-sale repair job. See Robin Towing Corp. v. Honeywell, Inc., 859 F.2d 1218, 1223 (5th Cir.1988) (where all repairs to the consumer's fire alarm device were obtained separately by oral request and none of the consumer's contracts with the supplier indicated that any maintenance service would be forthcoming, the supplier had extended no service contract as defined in the act); and 16 C.F.R. § 700.1(h) which provides in part, "Warranties on replacement parts and components used to repair consumer products are covered; warranties on services are not covered. Therefore, warranties which apply solely to a repairer's workmanship in performing repairs are not subject to the Act."
In conclusion, we agree with Griffin's contention that Smith proved no breach of a contractual obligation which rendered the automobile nonconforming. Therefore, we determine that the trial court erred in denying Griffin's motion for a directed verdict on the revocation of acceptance count. Because Smith's claim for revocation of acceptance was not proved, he is not entitled to an award of consequential damages under section 672.715(2)(a), Florida Statutes.
Accordingly, those portions of the final judgment awarding damages against Griffin for Smith's revocation of acceptance, including the award of consequential damages, are reversed, and this cause is remanded for entry of a final judgment in accordance with this opinion. Because we find the parties' other assertions of error to be without merit, in all other respects, the trial court is affirmed.
WOLF, J., concurs.
ERVIN, J., concurs and dissents with opinion.
. The Commission's views concerning the scope of the act are entitled to great weight. Boelens v. Redman Homes, Inc., 748 F.2d 1058, 1063 n. 6 (5th Cir.1984).