Opinion ID: 894577
Heading Depth: 1
Heading Rank: 4

Heading: The Twenty-Year Warranty

Text: The jury also found PPG breached a twenty-year limited warranty, which the trial court found was established as a matter of law. PPG argues the trial court erred by refusing to submit this warranty to the jury, and by failing to find it was barred by limitations.
There was no twenty-year warranty in any of the One Houston Center contract documents, even though they included hundreds of pages detailing every aspect of this multi-million-dollar building project. Instead, JMB relies on the following statement appearing in a PPG advertisement in Sweets' Architectural Guide, a trade publication often relied on by architects: Twindow units are warranted for twenty (20) years ... from the date of manufacture against failure of the hermetic seal due to faulty manufacturing of the unit by PPG. Pursuant to this limited warranty, PPG will only supply a new unit, and no labor, installation or special or consequential damages are included. This limited warranty is effective only if the unit is properly installed, and is not effective if the unit is installed in sloped glazing. PPG makes no other warranty. PPG argues this provision does not apply to One Houston Center because (1) it was not included in the contract documents, and (2) it had been shortened before the contract here was signed. The trial court refused PPG's request to submit the question to the jury, finding as a matter of law the statement in Sweets constituted a warranty applicable to Houston Center. The contract documents โ the bid documents, the general contract, and the contract signed by PPG โ all contained a number of provisions regarding warranties, but none approaching twenty years: โ the General Documents and Specifications issued for bids (dated March 29, 1976) required (1) a general guarantee regarding the curtain wall for five years from the date the work was accepted, and (2) a specific warranty regarding the glass for five years from completion of the work; โ the general contract between Houston Center and Bellows Construction Corporation (dated April 26, 1976) incorporated the contract bid documents and declared them to be the complete understanding of the parties with reference to the matters herein and therein set forth and there are no understandings nor commitments not expressly stated herein or therein; โ the curtain wall and glass contract between Bellows and Cupples Products Division (dated April 30, 1976) provided for (1) the warranties in the General Contract and (2) a one-year warranty for defects in materials or workmanship; โ the subcontract between Cupples and PPG (dated August 6, 1976 and signed by PPG December 28, 1976) provided for (1) a guarantee of all work for the period required in the general contract and bid specifications, (2) a five-year warranty regarding all defects, and (3) a one-year warranty for breakage from thermal conditions. The absence of a twenty-year warranty in any of the contract documents does not establish as a matter of law that none existed. The UCC provides that express warranties may arise other than those stated in a contract [101] and favors construing overlapping warranties as cumulative rather than conflicting. [102] But neither can we hold on these facts as a matter of law, that there was a twenty-year warranty. Before any extra-contractual statement becomes a warranty, it must become part of the basis of the bargain. [103] Thus, for example, a statement cannot be a basis of the bargain if one of the parties does not know about it. [104] The court of appeals pointed to a UCC comment explaining that for extraneous statements to become a warranty no particular reliance on such statements need be shown. [105] While particular reliance may not be necessary, we have held several times that something rather like it is. The basis-of-the-bargain requirement loosely reflects the common-law express warranty requirement of reliance, [106] and [r]eliance is also not only relevant to, but an element of proof of, plaintiffs' claims of breach of express warranty (to a certain extent). [107] Further, the court of appeals' quotation from the comment left off before the comment does, which continues, Rather, any fact which is to take such affirmations, once made, out of the agreement requires clear affirmative proof. The issue normally is one of fact.  [108] Here, there was conflicting evidence whether a twenty-year warranty was a basis of the parties' bargain. There was no evidence the contracting parties ever mentioned the Sweets ad in their negotiations, bid documents, or contracts. There is no evidence anyone other than Houston Center's lead architect (who worked for an outside firm) ever saw it. While the architect testified he relied on the Sweets warranty, jurors would not have been required to credit his testimony, as he did not explain why he omitted it when he drew up the bid specifications that included numerous shorter warranties. PPG's witnesses testified the parties' bargain was only what they included in their contract documents, not the unmentioned advertisement. Further, there was conflicting evidence whether the warranty in Sweets had been withdrawn or amended. It was undisputed that no warranty for Twindows appeared in Sweets in 1977 (when most of them were constructed and installed), and Twindows did not appear at all in the publication in 1978 (when the project was accepted and the five-year warranty issued). As the court of appeals noted, PPG's business records included a 1976 letter addressed to the trade and dated before PPG's contract that purported to shorten the warranty to ten years. [109] While no PPG witness could affirmatively recall when or if this letter was sent, a jury might attribute some blame for that fact to JMB's failure to file suit until eighteen years later. A jury might find the parties' bargain here included a twenty-year warranty in an advertisement in a trade magazine, even though they never discussed it and omitted it from the extensive contract documents. But they would not have to; they might also find the parties' bargain was no more than what they stated. As a result, the trial court erred in taking this question from the jury.
PPG also asserts that, even if there was a twenty-year warranty, it expired along with the five-year warranty on a date four years after extensive defects were discovered. [110] We agree with JMB's counter-argument that, unlike the five-year warranty, the twenty-year warranty (assuming it was part of the parties' bargain) did not accrue until the failure of each Twindow seal was or should have been discovered. As with the five-year warranty, the twenty-year warranty explicitly extended to future performance. But breach of the two warranties did not occur at the same time. The five-year warranty guaranteed the Twindows were free of defects, and thus was breached upon delivery in 1977 (although it did not accrue until discovery within those five years) because the Twindows were not free of defects at that time. But the twenty-year warranty guaranteed them against failure of the hermetic seal for twenty years. According to this plain language, even if every Twindow contained a manufacturing defect at delivery, there was no breach of the twenty-year warranty until a hermetic seal failed. Further, there was no breach at all for seals that failed after twenty years. Here again, JMB argues that its warranty claims accrued in September 1989 when PPG refused to replace any more Twindows. We rejected this argument with respect to the five-year warranty because repairs do not toll limitations; we reject it here for a different reason. JMB confuses a limitation of remedy with a breach of warranty. The UCC specifically allows parties to limit the remedies for breach of a warranty to repair or replacement: [T]he [parties'] agreement may provide for remedies in addition to or in substitution for those provided in this chapter and may limit or alter the measure of damages recoverable under this chapter, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts .... [111] In this case, PPG specifically limited all its warranties to replacement of defective Twindows units. There are consequences connected to a seller's failure to comply with a limited remedy, but changing the accrual date of limitations is not among them. Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in [UCC Chapter 2]. [112] In other words, when PPG stopped supplying additional Twindows in 1989, JMB's remedies were no longer limited to replacement; all damages provided by the UCC became available. But it neither stopped nor restarted limitations for breach of the underlying warranty. Assuming the twenty-year warranty was part of the parties' bargain, breach occurred when each hermetic seal failed. As long as PPG supplied replacements, Houston Center's owner could not sue โ not because there was no breach, but because there was no damage, as the only allowable remedy had been provided. Once PPG stopped making replacements, JMB could sue for seal failures that occurred thereafter, and could seek remedies other than replacement. Here, though HCC discovered defects in the Twindows in the 1980s, there was no evidence all the seals had failed by then. Indeed, PPG's own conduct is some evidence to the contrary, as it inspected all of them but replaced only some. And PPG presented no evidence that JMB should have known every seal would fail before 1998 when the twenty-year warranty expired. The parties' September 24, 1993 tolling agreement thus preserved JMB's breach of warranty claims concerning the twenty-year warranty as to any seals that failed after September 24, 1989, or those failing before which a reasonable owner would not have discovered by that date. There was evidence JMB learned of deterioration in Twindows units during its due-diligence investigations several months before it bought Houston Center in December 1989. [113] There was also evidence JMB requested a survey in mid-1991 of how many seals had failed, and obtained a bid for replacing every Twindow in the building. But the evidence did not establish as a matter of law that it should have known every seal had failed by either date; accordingly, the trial court correctly submitted the question to the jury.