Case Name: MERCURY MARINE, a Division of Brunswick Corporation v. CLEAR RIVER CONSTRUCTION CO., INC.
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 2003-03-06
Citations: 839 So. 2d 508
Docket Number: No. 2001-CA-01888-SCT
Parties: MERCURY MARINE, a Division of Brunswick Corporation v. CLEAR RIVER CONSTRUCTION CO., INC.
Judges: PITTMAN, C.J., SMITH, P.J., COBB AND CARLSON, JJ., CONCUR. GRAVES, J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. McRAE, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY DIAZ AND EASLEY, JJ.
Reporter: Southern Reporter, Second Series
Volume: 839
Pages: 508–530

Head Matter:
MERCURY MARINE, a Division of Brunswick Corporation v. CLEAR RIVER CONSTRUCTION CO., INC.
No. 2001-CA-01888-SCT.
Supreme Court of Mississippi.
March 6, 2003.
Douglas Drew Malone, Richard M. Ed-monson, Jackson, attorneys for appellant.
David W. Mockbee, Jackson, attorney for appellee.

Opinion:
WALLER, J.,
for the Court.
¶ 1. This case concerns the applicability of express and implied warranties contemplated by Mississippi's version of Article 2 of the Uniform Commercial Code. Clear River Construction Company was awarded a judgment of $30,000 on a jury verdict in the County Court of Rankin County, Mississippi, against Mercury Marine, a division of Brunswick Corporation, arising out of the sale of two outboard marine engines used by Clear River in competitive saltwater fishing. The judgment, affirmed by the Rankin County Circuit Court, was based on Mercury Marine's breaches of express and implied warranties with respect to the engines. Finding that Mercury Marine was not allowed a reasonable opportunity to cure, that there was no failure of the repair or replace warranty's essential purpose, and that there were no breaches of the implied warranties of merchantability and fitness for a particular purpose, we reverse and render.
FACTS AND PROCEDURAL HISTORY
¶ 2. Nicholas Travis, president of Clear River Construction Company, is involved in the competitive saltwater fishing of king mackerel. Realizing competitive saltwater fishing was expensive, Travis contacted Charles Henderson of Atlantic Marine Brokers in Waveland, Mississippi, in September of 1997 and proposed that Mercury Marine, a division of Brunswick Corporation, and World Cat Boats sponsor Travis in Division 7 of the Southern Kingfish Association. Mercury Marine accepted and made Travis a member of its Saltwater Pro Team. As one of approximately 1100 members in Mercury Marine's promotional programs, Travis would receive a substantial discount on Mercury Marine motors in exchange for Travis's promoting of its products by, for example, wearing Mercury Marine logo shirts and including the motors in promotional photographs.
¶ 8. Travis purchased a new World Cat catamaran boat for $52,359.50 and two new 1998 200-horsepower Mercury Mariner Offshore motors for $13,862.00 (slightly above dealer cost) and a $300 freight charge to transport the motors to World Cat's facilities in Greenville, North Carolina, for installation. Travis wanted to purchase Mercury Marine's new Optimax motors but was informed that Mercury Marine was having problems with the development of the Optimax motors at the time. The Mariner motors carried a typical repair or replace express warranty stating:
Claim shall be made under this warranty by delivering the Product for inspection to a Mercury Marine dealer authorized to service the Purchaser's Product. If Purchaser cannot deliver the Product to such authorized dealer, he may give notice in writing to the company. We shall then arrange for the inspection and repair, provided such service is covered under this warranty. Purchaser shall pay for all related transportation charges and/or travel time.
¶ 4. Travis took delivery of the boat and motors on November 18,1997, and planned to travel to Wilmington, North Carolina, for the Southern Kingfísh Association National Championship. A mechanic for Atlantic Marine Brokers traveled from Waveland to Greenville to assist in the installation and informed Travis when he took delivery that the motors had not been pre-run. Travis and the mechanic launched the boat in a nearby lake and realized that one of the motors would not run. Since the mechanic did not have the proper equipment to diagnose or repair the problem, Travis traveled to Crocker Marine, Mercury Marine's dealer in Wilmington. When Crocker Marine was unable to repair the motor, Travis traveled to another Mercury Marine dealer in Sneads Ferry, North Carolina, which was able to repair the problem, a defective throttle position indicator, as per the warranty. As a result, Travis was unable to "pre-fish," meaning scout for prime fishing areas prior to the tournament, and did not place.
¶ 5. The next problem with the motors occurred on August 7, 1998, during the GMC Gulf Coast Tournament at Dauphin Island, Alabama. In the meantime, nearly ten months had elapsed, and Travis had competed in four tournaments without any motor trouble. Specifically, the lower unit, or gear case, on the same motor which had malfunctioned earlier faded while Travis was fishing 83 miles offshore. After motoring back to shore on one motor, Travis had the lower unit replaced at Ed's Marine in Jackson at Mercury Marine's expense per the warranty. An inspection noted abnormal wear on the lower unit of the other motor which had yet to fail but was likewise replaced under the warranty. Travis had the two defective lower units rebuilt at his expense so that he could have them as spares. Mercury Marine usually kept the parts replaced under its warranties but allowed Travis to keep the old lower units and have them rebuilt.
¶ 6. Finally, on Friday, August 28, 1998, while pre-fishing in the Gulf of Mexico in preparation for the Cypress Cove Tournament, a rod bearing in the other motor failed thereby totally disabling it. Travis spoke with Joe Berkley, an employee of Dan Shad, head of Mercury Marine's promotional engine program, via cell phone from the Gulf requesting that they find a nearby mechanic or a spare motor. Travis likewise demanded that Mercury Marine air-freight a motor from its headquarters in Fond du Lac, Wisconsin, to Venice, Louisiana, for installation so that he could compete in the tournament. Berkley informed Travis that Mercury Marine would be unable to assist him as such and that he would have to take the motor to a Mercury Marine dealer for repair as required by the warranty.
¶ 7. Not being able to find a Mercury Marine dealer which would repair the motor that Friday night or the next morning, Travis traveled to a Yamaha dealership in New Orleans, Louisiana, which worked throughout the night installing a pair of new Yamaha outboard motors on Travis's World Cat boat. Travis spent over $21,000 on the Yamahas and returned to Venice to compete. The Mercury Marine motors had been operated approximately 132 hours and were subsequently repaired.
¶8. On October 26, 1998, Travis filed suit on behalf of Clear River seeking $34,980 for the costs of replacing the Mercury Marine motors with the Yamaha motors and loss of tournament prize winnings. The complaint alleged breach of express warranty and breaches of the implied warranties of merchantability and fitness for a particular purpose.
¶ 9. A Rankin County Court jury awarded Clear River $30,000. Judgment was entered in conformance with the verdict and added the stipulation that the Mercury Marine motors were to be returned to Mercury Marine. The Rankin County Circuit Court affirmed.
¶ 10. Mercury Marine alleges eleven assignments of error. However, our discussion focuses on the following four issues, the discussion of which renders all others moot:
I. WHETHER MERCURY MARINE WAS GIVEN A REASONABLE OPPORTUNITY TO CURE.
II. WHETHER MERCURY MARINE'S "REPAIR OR REPLACE" WARRANTY FAILED OF ITS ESSENTIAL PURPOSE.
III. WHETHER MERCURY MARINE BREACHED THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
IV. WHETHER THE TRIAL COURT ERRED IN INSTRUCTING THE JURY ON INCIDENTAL AND CONSEQUENTIAL DAMAGES.
STANDARD OF REVIEW
¶ 11. While we accord jury verdicts great deference, we will set aside such a verdict when a jury was improperly instructed, misled, confused, or ignores the weight of the evidence. Jackson v. Daley, 739 So.2d 1031, 1039 (Miss.1999) (citing McKinzie v. Coon, 656 So.2d 134, 142 (Miss.1995)).
DISCUSSION
I. WHETHER MERCURY MARINE WAS GIVEN A REASONABLE OPPORTUNITY TO CURE.
¶ 12. Mercury Marine first argues that Travis failed to afford it a reasonable opportunity to cure the motors' defects. By purchasing the Yamaha motors on the same day as the malfunction of the Mercury Marine motor and filing suit to recover the cost of the Yamaha motors, Mercury Marine contends that Travis failed to satisfy a legal prerequisite to recovery, namely, cure. Travis responds that the Mercury Marine motors failed on three different occasions and that Mercury Marine was given a reasonable opportunity to cure the defect each time, even the final time.
¶ 13. In Fitzner Pontiac-Buich-Cadillac v. Smith, 523 So.2d 324 (Miss.1988), Smith purchased a used car and sued the dealer alleging breach of express and implied warranties when the car experienced problems with, among other things, an intake gasket, transmission, and radiator. Rather than bringing the car to Fitzner for repair, Smith unconditionally insisted that the contract for the car be deemed rejected and that he be given his money back. 523 So.2d at 328. In reversing and rendering a jury verdict in favor of Smith for the purchase price of the car, we noted the following regarding a seller's right to cure:
We recognize that a strict reading of the cure provisions of Miss.Code Ann. § 75-2-508 (1972) reveals no explicit application to the revocation situation with which we are here concerned. The law's policy of minimization of economic waste strongly supports recognition of a reasonable opportunity to cure. Though the express language of Section 75-2-508 does not apply here, cure is not excluded by Section 75-2-608. By analogy to Section 75-2-508 and in furtherance of the policy justification un-dergirding that statute and our common law doctrine of cure in contracts generally, we recognize that, before Smith was entitled to get his money back, Fitz-ner had a right to a reasonable opportunity to cure the vehicle's deficiencies.
523 So.2d at 328 n. 1 (citations omitted & emphasis added).
¶ 14. We agree with Mercury Marine that Travis should have brought the malfunctioning motor to a Mercury Marine dealer for repair according to the warranty. The two prior defects had been repaired under the warranty without question. Also, the third and final malfunction occurred on a motor that had yet to experience problems. The fact is that the same thing never broke twice over the ten months Travis used the motors, and there was never any indication that Mercury Marine would not repair the broken rod bearing. Mercury Marine should have been allowed to cure the defective motor. See Tucker v. Aqua Yacht Harbor Corp., 749 F.Supp. 142 (N.D.Miss.1990) (applying Mississippi law) (finding that in a case which was instituted while repairs were being made to piston defect on boat motor, manufacturer should have been allowed to cure and thus could not be held liable for breaches of express and implied warranties).
¶ 15. Also, this case is readily distinguishable from our prior opinions in which we found that the right to cure was not unlimited in the wake of repeated deficiencies and repeated attempts at repair. Guerdon Indus., Inc. v. Gentry, 531 So.2d 1202 (Miss.1988) (finding right to cure not unlimited in case where seller made ten attempts to repair a mobile home's defects in a five-month period); Rester v. Morrow, 491 So.2d 204 (Miss.1988) (holding likewise in a ease where plaintiffs Renault automobile experienced problems with its electrical system, air conditioner, and oil indicator gauge justified buyer's revocation of acceptance).
II. WHETHER MERCURY MARINE'S "REPAIR OR REPLACE" WARRANTY FAILED OF ITS ESSENTIAL PURPOSE.
¶ 16. During the discussion on jury instructions, the trial court stated the following when it decided to permit an instruction on failure of essential purpose:
I am prepared to instruct the jury that the specific warranty here and limitations in the warranty failed of its essential purpose because under the facts of this case, the Mercury warranty did not do Mr. Travis or Clear River any good when he was out there in the middle of the ocean trying to engage in tournament fishing, and the engines went out or either didn't work to start with or went out in the middle of tournaments.
Reasoning that a motor malfunction in the ocean justifies an instruction on failure of essential purpose is untenable.
¶ 17. Under Miss.Code Ann. § 75-2-719(2), "Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Code." While Section 75-2-719(2) clearly allows a plaintiff to seek redress under the Code, it fails to define a failure of essential purpose, much less its application to a repair or replace warranty. That aside, academic commentary has noted:
The purpose of a repair-or-replace contracted remedy is to give the buyer what he bargained for, namely goods that measure up to the contract, and to expand the seller's right to cure beyond the bounds established by Section 2-508. This purpose is defeated if the goods are destroyed by their own flaws so that repaii' or replacement are totally unsatisfactory.
Conversely, where the prescribed remedy term appears to be intended to cover the loss that has occurred, there can be no failure of essential purpose, though the application of the term to the situation at hand may raise questions of unconscionability. In commercial transactions where the doctrine of unconscio-nability is avoided, a court might be tempted in such a situation to limit the effect of the prescribed remedy on ground of failure of essential purpose or failure to provide a fair quantum of relief, but technically such a holding would be incorrect. In consumer cases, however, the doctrine of unconscionability is sometimes used as an alternative reason to avoid the enforcement of the eontract-ed-for remedy.
2 William D. Hawkland, Uniform Commercial Code Series § 2-719:3, at 2-615 to - 617 (1998).
¶ 18. The trial court's statement that the warranty did not do Travis any good "when he was out there in the middle of the ocean" hints at unconscionability. As a federal court in Washington noted in a case in which four $3 million tuna boats experienced problems with their reduction gear units and main propeller engines and carried repair or replace warranties:
What was a "reasonable time" within the contemplation of the parties when they contracted for this remedy will depend upon their understanding of the likelihood and consequences of engine failure on a tuna boat. Since the repair remedy by definition anticipates some failure, this alone could not frustrate the remedy's purpose. Likewise, the mere occurrence of lost profits would not defeat the remedy because some such damages would be expected to flow from engine failure.
Tacoma Boatbuilding Co. v. Delta Fishing Co., 28 U.C.C. Rep. Serv. 26, n. 10 (W.D.Wash.1980) (citations omitted & emphasis added). Merely because a boat's engine fails in the ocean, the very place it is supposed to operate, does not mean that the limited warranty of repair or replacement fails of its essential purpose.
¶ 19. The instant case also does not evidence repeated attempts by Mercury Marine to correct defects and the repeated failure to do so. We recognize that courts have consistently held that such repeated attempts amount to a failure of a warranty's essential purpose. See AES Tech. Sys., Inc. v. Coherent Radiation, 583 F.2d 933 (7th Cir.1978); Durfee v. Rod Baxter Imports, Inc., 262 N.W.2d 349 (Minn.1977); Givan v. Mack Truck, Inc., 569 S.W.2d 243 (Mo.Ct.App.1978). We cannot say that three separate incidents over a ten-month period amount to such a failure. Mercury Marine's limited warranty did not fail of its essential purpose.
III. WHETHER MERCURY MARINE BREACHED THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
¶ 20. Mississippi does not allow the disclaimer of the implied warranties of merchantability or fitness for a particular purpose. Miss.Code Ann. § 75-2-315.1. See Gast v. Rogers-Dingus Chevrolet, 585 So.2d 725, 728 (Miss.1991). As a result, we agree with the trial court that these warranties could not be excluded, but we disagree that they were breached.
¶ 21. Travis went to great lengths to show that he was not a normal customer because he was a member of Mercury Marine's Saltwater Pro Team, albeit one of 1100 members of Mercury Marine's promotional programs. He assumed that he was entitled to a higher level of service by virtue of such membership when all for which he contracted was a discounted price on the motors in exchange for various promotional services. There is nothing in the sponsorship program entitling him to special treatment outside of the repair or replace warranty or standard implied warranties.
¶22. We find the fact that Mercury Marine was not afforded an opportunity to cure fatal to the jury's verdict. As discussed above in Fitzner, the seller was entitled to an opportunity to repair the vehicle. We likewise noted:
Smith later tried to get out of his deal with Fitzner. This occurred on August 20, 1984, when Smith delivered to Fitz-ner a letter "rejecting the contract" and telling Fitzner he "wanted . [his] money back." At this point Smith had no right of rejection. He had at most a right to revoke his acceptance. Miss. Code Ann. § 75-2-608 (1972). In such circumstances, though there may have been a breach of the warranty of merchantability, the seller has a right to attempt cure.
523 So.2d at 327-28 (ellipsis and brackets in original) (emphasis added).
¶23. This reasoning was applied in Tucker v. Aqua Yacht Harbor Corp., 749 F.Supp. 142 (N.D.Miss.1990). In Tucker, the court held that a manufacturer of boat engines was entitled to cure ailments of oil leakage and low oil pressure caused by defective pistons. Id. at 147. On the issue of implied warranties, the court applied Fitzner and stated that "the seller must be afforded a reasonable opportunity to cure, even though there may have been a breach of an implied warranty." Id. at 145. That same prerequisite to recovery is also present under the Magnuson-Moss Warranty Act. Id. See 15 U.S.C. § 2310(e) (2002) (stating "No action . may be brought . unless the person obligated under the warranty or service contract is afforded a reasonable opportunity to cure such failure to comply").
¶ 24. The dissent, in attempting to justify a jury verdict, would effectively render null the UCC's requirement of a reasonable opportunity to cure. Demanding warranty repair work on offshore outboard boat motors under a standard repair or replace warranty on a Friday night or Saturday morning cannot be considered reasonable under these or most any facts. Such a position would be not only improvident but also economically devastating, since sellers would be unwilling or unable to comply with such a truncated definition of "reasonable."
IY. WHETHER THE TRIAL COURT ERRED IN INSTRUCT ING THE JURY ON INCIDENTAL AND CONSEQUENTIAL DAMAGES.
¶ 25. Since we find that the express and implied warranties were not breached because Travis did not allow Mercury Marine to cure, it is axiomatic that the trial court erred in instructing the jury on incidental and consequential damages.
CONCLUSION
¶ 26. We find that Travis did not provide Mercury Marine a reasonable opportunity to cure the broken rod bearing. There was also no failure of the repair or replace warranty's essential purpose or breaches of the implied warranties of merchantability or fitness for a particular purpose. The evidence is insufficient to sustain the jury's verdict. Therefore, the Rankin County Court judgment entered in accordance with a $30,000 jury verdict and the judgment of the Rankin County Circuit Court are reversed, and judgment is hereby rendered in favor of Mercury Marine, finally dismissing the complaint and this action with prejudice.
¶27. REVERSED AND RENDERED.
PITTMAN, C.J., SMITH, P.J., COBB AND CARLSON, JJ., CONCUR. GRAVES, J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. McRAE, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY DIAZ AND EASLEY, JJ.