Opinion ID: 2281968
Heading Depth: 1
Heading Rank: 11

Heading: TEAM's Claims for Breach of Implied Warranty

Text: In its implied warranty claim, TEAM does not encounter the same privity problem as Renaissance because it seeks recovery against Great Plains on the theory that it was assigned Crush's right of recovery for breach of implied warranty. When the plaintiff has been assigned the warranty claims of a buyer who is in privity with the seller, an action for recovery of economic loss based on breach of implied warranty is not barred by lack of vertical privity. See, e.g., Ashley Square, Ltd. v. Contractors Supply of Orlando, Inc., 532 So.2d 710, 711 n. 1 (Fla.App.1988). Crush was in privity with Great Plains, the seller. As discussed above, the evidence is sufficient for a jury to find a valid assignment of Crush's warranty claims to TEAM. TEAM may bring implied warranty claims under the same theory of assignment discussed in the section on express warranties. Section 2-314 of the UCC creates an implied warranty of merchantability, which warrants that goods must be at least fit for the ordinary purposes for which such goods are used. § 400.2-314.2(c). Section 2-315 creates an implied warranty of fitness for a particular purpose, which applies [w]here the seller at the time of contracting has reason to know of any particular purpose for which the goods are required and ... the buyer is relying on the seller's skill or judgment to select or furnish suitable goods. § 400.2-315. To recover for breach of either of these implied warranties, a plaintiff must prove that the buyer was injured by the defective nature of the goods. Ragland Mills, 763 S.W.2d at 360. Here, Crush was the immediate buyer and TEAM the alleged assignee. Because an assignee merely steps into the shoes of the assignor, TEAM must allege facts showing that Crush would have been entitled to relief. Louisiana Farmers' Protective Union, 131 F.2d at 423. As in its express warranty argument, TEAM fails either to plead or to prove that Crush was injured by the defective nature of the terrain leveler. Summary judgment for Great Plains was proper on the implied warranty claims of both plaintiffs.
Renaissance and TEAM also assert that they are able to collect against Great Plains on a breach of contract theory. The alleged breach of contract was premised on the claim that the T1055 was expected to accomplish terrain leveling but would not perform these tasks. The plaintiffs assert that the breach of contract claim was owned by Crushas the retail purchaserand was transferred either to Renaissance when the machine was conveyed or to TEAM when Crush/Mo-Kan was dissolved and the liquidation assets were distributed to Uhlmann, who then transferred them to TEAM. Under Missouri law, remedies for economic loss sustained by reason of damage to or defects in products sold are limited to those under the warranty provisions of the UCC. Wilbur Waggoner Equipment & Excavating Co. v. Clark Equipment Co., 668 S.W.2d 601, 602 (Mo. App.1984). The UCC recognizes that breach of contract and breach of warranty are not the same cause of action. The remedies for breach of contract are set forth in section 2-711 and are available to a buyer [w]here the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance. § 400.2-711.1. The remedies for breach of warranty are set forth in section 2-714 and are available to a buyer who has finally accepted goods, but discovers that the goods are defective in some manner. § 400.2-714; see also 1 White & Summers, UCC 702-3 (We believe that only buyers who have accepted and neither rightfully rejected nor effectively revoked can use 2-714.). Here, the plaintiffs do not assert that Great Plains failed to make delivery or repudiated or that Crush rightfully rejected or justifiably revoked acceptance. There is no dispute that Crush accepted delivery of the T1055 and notified Great Plains about the machine's inability to perform terrain leveling adequately. Accordingly, Renaissance and TEAM cannot recover under section 400.2-711 for breach of contract. [21] Their contract claims are subsumed by their breach of warranty claims for damages under section 400.2-714, which already have been addressed above. Plaintiffs' breach of contract claims fail as a matter of law.
In their second point relied on, Uhlmann and TEAM argue that summary judgment for Vermeer on the fraudulent and negligent misrepresentation claims was improper because (a) Uhlmann was harmed directly by Vermeer's misrepresentations to him individually, (b) TEAM was assigned any misrepresentation claims belonging to the original purchaser, and (c) material facts exist showing that Uhlmann and TEAM can establish each element of their fraudulent and negligent misrepresentation claims. Those claims are based on two representations allegedly made by Vermeer to Crush and Uhlmann. As stated in the plaintiffs' petition, the first representation occurred when Vermeerprior to Crush's purchase of the T1055 and in order to induce the purchaseallegedly told Crush and Uhlmann that the T1055 would perform terrain leveling and surface mining. The second representation occurred when Vermeer, after the purchase, allegedly told Crush and Uhlmann that the machine could be repaired or fixed so that it could perform terrain leveling as represented prior to sale and as represented in the advertising. Because the two representations giving rise to both the fraud and the negligent misrepresentation claims are separate and distinct, each representation will be discussed in turn.
The elements of fraudulent misrepresentation are: (1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) the speaker's intent that it should be acted on by the person in the manner reasonably contemplated; (6) the hearer's ignorance of the falsity of the representation; (7) the hearer's reliance on the representation being true; (8) the hearer's right to rely thereon; and (9) the hearer's consequent and proximately caused injury. Larabee, 271 S.W.3d at 546. A plaintiff's failure to establish any one of the essential elements of fraud is fatal to recovery. Verni v. Cleveland Chiropractic College, 212 S.W.3d 150, 154 (Mo. banc 2007). Because the reliance element is dispositive for the first representation and the falsity element is dispositive for the second representation, only those elements will be discussed.