Opinion ID: 2354428
Heading Depth: 1
Heading Rank: 4

Heading: The Statement at Issue Constituted An Express Warranty

Text: Maryland Code (1975, 2002 Repl.Vol.), Section 2-313 of the Commercial Law Article governs express warranties by affirmation, promise, description, [or] sample, and provides in pertinent part: (1) Express warranties by the seller are created as follows: (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise. (b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.    (2) It is not necessary to the creation of an express warranty that the seller use formal words such as warrant or guarantee or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty. Official Comment 3 to Section 2-313 further elaborates: 3. The present section deals with affirmations of fact by the seller, descriptions of the goods or exhibitions of samples, exactly as any other part of a negotiation which ends in a contract is dealt with. No specific intention to make a warranty is necessary if any of these factors is made part of the basis of the bargain. In actual practice affirmations of fact made by the seller about the goods during a bargain are regarded as part of the description of those goods; hence no particular reliance on such statements need be shown in order to weave them into the fabric of the agreement. 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. Moreover, Official Comment 7 also elucidates the law governing the case sub judice: 7. The precise time when words of description or affirmation are made or samples are shown is not material. The sole question is whether the language or samples or models are fairly to be regarded as part of the contract. If language is used after the closing of the deal (as when the buyer when taking delivery asks and receives an additional assurance), the warranty becomes a modification, and need not be supported by consideration if it is otherwise reasonable and in order. In the case sub judice, Ms. Levy-Gray alleges that the language take [doxycycline] with food or milk if stomach upset occurs unless your doctor directs you otherwise constitutes an affirmative statement by Rite Aid that the doxycycline is compatible with the simultaneous consumption of milk or other dairy products, which constitutes an express warranty. Conversely, Rite Aid asserts that the information at issue cannot be considered an express warranty because it is derived from the FDA-approved language developed by the manufacturer of the doxycycline and was presented with the statement that it should not be construed to indicate that use of the drug is safe, appropriate, or effective for you. The similarity between Rite Aid's advice and that of Watson does not preclude Rite Aid's statement from constituting a warranty on its part. The language was Rite Aid's, and it was in no way attributed to Watson. Ms. Levy-Gray would necessarily assume that the advice was entirely that of Rite Aid. The jury reasonably could infer that Rite Aid represented to Ms. Levy-Gray that the doxycycline was compatible with milk consumption. Moreover, we decline to hold that a general disclaimer would preclude any express warranty in this case as a matter of law, because a reasonable consumer could conclude that the general statement did not negate the effect of the more specific assertion as to the administration of the doxycycline when the entire document is read as a whole. From the language of the Rite Advice pamphlet, the jury could reasonably infer from the evidence introduced that the phrase take with food or milk if upset stomach occurs, although not guaranteeing effectiveness, affirmed that milk would not adversely impact the efficacy of the drug. The issue of fact concerning the interplay between the general disclaimer and the administration instruction was properly before the jury and we must give deference to the inferences a fact-finder may draw. State v. Smith, 374 Md. 527, 534, 823 A.2d 664, 668 (2003). An affirmation of fact must become part of the basis of the bargain for the statement to be considered an express warranty. The term bargain is not defined in the Uniform Commercial Code, but is itself used in the definition of agreement in Maryland Code (1975, 2002 Repl.Vol.), Section 1-201(3) of the Commercial Law Article, which provides in pertinent part: Agreement means the bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in Titles 1 through 10 of this article. Rite Aid argues that for an affirmation to become part of the basis of the bargain, the affirmation must be a negotiated term of the agreement, or the consumer must at least have been aware of its existence prior to the consummation of the deal. Based on the circumstances surrounding most purchases in modern commercial dealing, we disagree. Official Comment 7 to Section 2-313 provides, [t]he precise time when words of description or affirmation are made or samples are shown is not material. The sole question is whether the language. . . [is] fairly to be regarded as part of the contract. Md.Code (1975, 2002 Repl.Vol.), § 2-313 official cmt. 7 of the Commercial Law Article. The clear implication of Official Comment 7 is that express warranties may be formed prior to the completion of the sale or even after the sale has been consummated. What is paramount is the relationship between the sale of the goods and the affirmations made by the seller. Various commentaries on the Uniform Commercial Code have similarly recognized the reality that warranties are often given at the time of the sale such that the buyer does not become aware of their terms until after the sale is finished: As it is common knowledge that sellers will deliver written warranties after the contract has been made, some courts are recognizing that later statements found in these writings are part of the basis of the bargain. 3 Lary Lawrence, Anderson on the Uniform Commercial Code, § 2-313:66 at 60 (3d ed.2002); see also James J. White & Robert S. Summers, Uniform Commercial Code, § 9-5 at 354-55 (5th ed.2000). We agree with the analysis explicated in Murphy v. Mallard Coach Co., 179 A.D.2d 187, 582 N.Y.S.2d 528 (N.Y.App.Div.1992), in which the court rejected an argument identical to that presented by Rite Aid: [W]e believe that while the warranty was technically handed over after plaintiffs paid the purchase price, the fact that it was given to plaintiffs at the time they took delivery of the motor home renders it sufficiently proximate in time so as to fairly be said to be part of the basis of the bargain ( compare, UCC 2-313, comment 7; 1 White and Summers, Uniform Commercial Code, § 9-5 at 448-455 [3d ed.]; cf., Marine Midland Bank v. Carroll, 98 A.D.2d 516, 471 N.Y.S.2d 409). To accept the manufacturer's argument that in order to be part of the basis of the bargain the warranty must actually be handed over during the negotiation process so as to be said to be an actual procuring cause of the contract, is to ignore the practical realities of consumer transactions wherein the warranty card generally comes with the goods, packed in the box of boxed items or handed over after purchase of larger, non-boxed goods and, accordingly, is not available to be read by the consumer until after the item is actually purchased and brought home. Indeed, such interpretation would, in effect, render almost all consumer warranties an absolute nullity. Id. at 531. This position also was adopted by the United States District Court for the Southern District of Indiana in In re Bridgestone/Firestone, Inc. Tires Prods. Liability Litigation, 205 F.R.D. 503 (S.D.Ind. 2001), rev. on other grounds, 288 F.3d 1012 (7th Cir.2002). Specifically, the court noted, in basing its conclusion on Official Comment 7 to Section 2-313 of the Uniform Commercial Code: The official comments to U.C.C. § 2-313 support this holding. Official Comment 7 provides: The precise time when words of description or affirmation are made or samples are shown is not material. The sole question is whether the language or samples or models are fairly to be regarded as part of the contract. A buyer certainly cannot prove that she relied upon an affirmation made after the closing of the deal in deciding whether to consummate the deal; however, the U.C.C. clearly contemplates that such post-sale affirmations can be enforced as warranties, as long as they are fairly to be regarded as part of the contract. Id. at 527 (citations omitted). Moreover, the court determined that the interpretation urged by the defendants in In re Bridgestone/Firestone, and by Rite Aid before this Court, `would, in effect, render almost all consumer warranties an absolute nullity,' inasmuch as it is common practice for warranty booklets to be provided to consumers inside the sealed box in which a product is packaged, or, in the case of vehicles, in the glove box of a new car upon delivery. Id. at 527 n. 31 (citation omitted). This view was the basis for the Superior Court of Pennsylvania's reversal of the entry of summary judgment in favor of the seller in an action for breach of warranty for a used truck in Weiss v. Keystone Mack Sales, Inc., 310 Pa.Super. 425, 456 A.2d 1009 (1983). The trial court's grant of summary judgment was premised upon a warranty-exclusion clause, which was prominently displayed on the purchase order, and provided: THIS TRUCK SOLD AS IS, WHERE IS. NO WARRANTY OR GUARANTEE IS OFFERED OR IMPLIED. Id. at 1010. In the buyer's answer to the seller's interrogatories, however, he alleged that the salesman had orally advised him that the truck was the best-running truck that Keystone Mack had purchased from [its supplier], and . . . that . . . [it] was in excellent condition. Id. The buyer also introduced into evidence a handwritten note on a repair order that he received following the vehicle's purchase stating: 30 day warranty 50/50 on the 250 Cummins engine. If a problem develops have the truck brought back to us. We certify that the engine is in excellent running condition. Id. Addressing the seller's conduct in attempting to make repairs after the truck's purchase, the court stated: Also, the lower court confined its view of the case to the purchase order. The record suggests, however, that the events on which appellant's claim is based did not end with the signing of the purchase order. As we have discussed, when appellant complained that the engine was emitting smoke, appellee undertook to repair it, and gave appellant a 30 day warranty 50/50 on the engine, and certif[ied] that the engine was in excellent running condition. Then, when it was discovered that the engine had in fact a cracked block, appellee replaced it, taking some sixty-seven days to do so. It is by no means clear  and the lower court did not consider  whether appellee's conduct subsequent to the execution of the purchase order resulted in a new contractual or warranty obligation coming into being, either as a proper modification of the purchase order, or as an obligation created later than and distinct from the purchase order. Id. at 1012. Thus, the court recognized that express warranties may arise after the contract for sale is consummated. In Bigelow v. Agway, 506 F.2d 551 (2d Cir.1974), the United States Court of Appeals for the Second Circuit considered the issue of whether warranties made after a sale is completed may become a basis of the bargain. In Bigelow, a farmer sued the manufacturer and distributor of a chemical used to treat hay before baling. Although the record before the court reflected that most farmers would not bale hay that had a moisture level higher than twenty to twenty-five percent, two months after the sale and use of the chemical, the defendant's salesman guaranteed that hay treated with the chemical was safe to bale even if it contained a moisture level of thirty-two to thirty-four percent. The farmer baled the hay, and the level of moisture contributed to a fire that destroyed his entire crop. The Second Circuit, rejecting the defendant's argument that the salesman's representation after the sale was not part of the basis of the bargain, noted: Although defendants might conceivably contend that since [the salesman's] representation postdated the delivery of the [chemical] . . . and therefore could not be the basis of the bargain as required for recovery . . ., it is undisputed that the [salesman's] visit . . . was to promote the sale of the product. Thus they might constitute an actionable modification of the warranty. Id. at 555 n. 6. See also Downie v. Abex, 741 F.2d 1235, 1240 (10th Cir.1984) (noting that a rational jury could have found that GM's post-sale representations about the safety of ball-screw assemblies with yolk deflectors were designed to promote future sales . . . [because] GM sent Abex brochures discussing the safety features for distribution to Abex's customers.); Glyptal Inc. v. Engelhard Corp., 801 F.Supp. 887, 895 (D.Mass.1992) (holding that a telephone conversation in which the defendant's service representative made affirmations concerning the comparable quality of substituted goods that occurred post-sale could constitute an express warranty); Phillips Petroleum Co. v. Bucyrus-Erie Co., 131 Wis.2d 21, 388 N.W.2d 584, 590 (1986) (concluding that incorporation into approval drawings, after sale, of specification of grade of steel, created express warranty by modification of original contract); Jones v. Abriani, 169 Ind.App. 556, 350 N.E.2d 635, 644-45 (1976) (determining that promises made to buyers of mobile home after contract of purchase was signed, including promise that all defects would be repaired, amounted to express warranty); Winston Indus., Inc. v. Stuyvesant Ins. Co., Inc., 55 Ala.App. 525, 317 So.2d 493, 496-97 (1975) (holding that express warranty existed despite fact that buyer did not receive copy of the manufacturer's warranty with the sale and had no knowledge of its terms). Rite Aid attempts to distinguish these cases by arguing that the warranties were expressly labeled as such and that the warranties were actually remedial promises under Official Comment 11 to Section 2-313, which provides in pertinent part: A promise about the quality or performance characteristics of the goods creates an express warranty if the other elements of a warranty are present whereas a promise by which the seller commits itself to take remedial action upon the happening of a specified event is a remedial promise. The distinction has meaning in the context of the statute of limitations.    The concept of remedial promise is dealt with in a separate subsection to make clear that it is a concept separate and apart from express warranty and that the elements of an express warranty, such as basis of the bargain, are not applicable. 3 Lary Lawrence, Anderson on the Uniform Commercial Code, § 2-313:339 (3d ed. Supp.2005). We are not persuaded by Rite Aid's argument. Under the plain language of Maryland Code (1975, 2002 Repl.Vol.), Section 2-313(2) of the Commercial Law Article, [i]t is not necessary to the creation of an express warranty that the seller use formal language such as `warrant' or `guarantee' or that he have a specific intention to make a warranty. Thus, the fact that the assertions contained in the Rite Advice pamphlet did not include language expressly indicating that the information listed therein was a warranty does not preclude a finding that it gave rise to an express warranty. Furthermore, Rite Aid's reliance on Official Comment 11 to Section 2-313 of the Uniform Commercial Code, as enunciated in Anderson On The Uniform Commercial Code, is misplaced. The Maryland General Assembly has not adopted Official Comment 11 as part of the Official Comment that accompanies the Uniform Commercial Code in the Commercial Law Article, nor has the Legislature enacted any statute that recognizes remedial promises as distinct from express warranties. Moreover, the cases at issue analyze the terms of the written warranties in terms of express warranties, not remedial promises. Thus, the reasoning remains persuasive. Rite Aid also relies on the learned intermediary doctrine, which applies to the tripartite relationship between the drug manufacturer, the prescribing physician, and the patient, as supporting the proposition that pharmacists cannot be held liable for the breach of express warranty because the patient is presumed to have relied upon the advice rendered by her physician. As stated by the Restatement (Third) of Torts, the traditional rules [are] that drug and medical-device manufacturers are liable only when their products contain manufacturing defects or are sold without adequate instructions and warnings to prescribing and other health-care providers. Restatement (Third) Torts: Products Liability § 6, Liability of Commercial Seller Or Distributor For Harm Caused By Defective Prescription Drugs And Medical Devices, cmt. a. This principle is further explicated in comment b, which provides in pertinent part: The obligation of a manufacturer to warn about risks attendant to the use of drugs and medical devices that may be sold only pursuant to a health-care provider's prescription traditionally has required warnings directed to health-care providers and not to patients. The rationale supporting this learned intermediary rule is that only health-care professionals are in a position to understand the significance of the risks involved and to assess the relative advantages and disadvantages of a given form of prescription-based therapy. The duty then devolves on the health-care provider to supply to the patient such information as is deemed appropriate under the circumstances so that the patient can made an informed choice as to therapy. The learned intermediary doctrine has been extended to provide a defense to pharmacies and pharmacists by the courts of other jurisdictions. See In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Products Liability Litigation, 220 F.Supp.2d 414, 423 (E.D.Pa. 2002); Moore v. Memorial Hospital of Gulfport, 825 So.2d 658, 666 (Miss.2002); Morgan v. Wal-Mart Stores, Inc., 30 S.W.3d 455, 469 (Tex.Ct.App.2000); Griffith v. Blatt, 158 Or.App. 204, 973 P.2d 385, 390 (1999); Johnson v. Walgreen Co., 675 So.2d 1036, 1037 (Fla.Dist.Ct.App.1996); Walker v. Jack Eckerd Corp., 209 Ga.App. 517, 434 S.E.2d 63, 67 (1993); Fakhouri v. K Mart Corp., 248 Ill.App.3d 328, 187 Ill. Dec. 927, 618 N.E.2d 518, 521 (1993); Mazur v. Merck & Co., 964 F.2d 1348, 1356 (3d Cir.1992); Nichols v. Central Merch., Inc., 16 Kan.App.2d 65, 817 P.2d 1131, 1133 (1991); Ferguson v. Williams, 101 N.C.App. 265, 399 S.E.2d 389, 393 (1991); Laws v. Johnson, 799 S.W.2d 249 (Tenn. App.1990); McKee v. American Home Prods. Corp., 113 Wash.2d 701, 782 P.2d 1045, 1050 (1989); Adkins v. Mong, 168 Mich.App. 726, 425 N.W.2d 151, 152 (1988); Ingram v. Hook's Drugs, Inc., 476 N.E.2d 881 (Ind.App.1985); Kinney v. Hutchinson, 449 So.2d 696, 698 (La.Ct.App.1984). In support of its position, Rite Aid also relies upon the analysis articulated in In re Rezulin Prods. Liability Litigation, 133 F.Supp.2d 272 (S.D.N.Y.2001). Rezulin was a prescription diabetes medication, the use of which gave rise to hundreds of lawsuits against its manufacturer. Sixteen of those actions were consolidated in the United States District Court for the Southern District of New York for pretrial proceedings by the Judicial Panel on Multidistrict Litigation. One of the many issues presented in In re Rezulin was whether the pharmacies that had filled the plaintiffs' prescriptions for Rezulin had been fraudulently joined as defendants in an effort to preserve federal diversity jurisdiction. The determination of whether the pharmacies were fraudulently joined turned on whether the plaintiffs could state a legally sufficient and factually arguable claim for relief against the pharmacies. Id. at 279. Among the various claims asserted against the pharmacies was breach of express warranty. After examining the law of each of the states involved, the court determined that a pharmacy was not liable to the patient for failure to warn because those states either applied, or were expected to adopt in the future, to pharmacies the defense derived from the learned intermediary doctrine. Thus, the court concluded that, because patients rely on their physicians when purchasing a prescription drug, and not on pharmacists, a cause of action based on the breach of an express warranty did not lie. The court explained: Patients who purchase prescription drugs from pharmacists do not negotiate or bargain with the pharmacists about the suitability of the product. Even assuming a pharmacist were to make a representation about the safety of a particular drug, the representation would not form part of the basis of the bargain as required by the [Uniform Commercial Code] because the patient purchases the drug on the basis of discussions with his or her physician. Unlike the buyer-seller relationship in normal sales transactions, the relationship between the patient and the pharmacist is a function of a regulatory system requiring that certain drugs be sold solely by prescription of a physician. It is through the pharmacy that the patient purchases the drug, but in only this sense does the pharmacy function as a seller. The only representations regarding the intrinsic properties of the drug that form the basis of the buyer's purchase are those of the physician. It is precisely for this reason that the learned intermediary doctrine focuses on communications between the manufacturer and physicians, rather than patients or pharmacies; it is the physicians who make the ultimate decision on whether to prescribe the drug. Id. at 291-92. As the Court of Special Appeals aptly noted, neither In re Rezulin nor Salisbury v. Purdue Pharma, L.P., 166 F.Supp.2d 546 (E.D.Ky.2001), upon which Rite Aid also relies, involve a patient package insert prepared by, or on behalf of, the pharmacy and distributed under its name. We adopted a form of the learned intermediary doctrine in People's Serv. Drug Stores, Inc. v. Somerville, 161 Md. 662, 158 A. 12 (1932). In that case, the plaintiff filed an action sounding in negligence against a pharmacy that had filled a prescription for capsules, which each contained one-fourth grain of strychnine along with other ingredients. The theory of the plaintiff's case was that the pharmacists should not have filled the prescription because the strychnine content was excessive. In reversing a judgment in favor of the plaintiff, we stated: [I]t does not follow, because a physician in a given case is liable, that the druggist who filled the prescription is also liable. It would be a dangerous principle to establish that a druggist cannot safely fill a prescription merely because it is out of the ordinary. If that were done, many patients might die from being denied unusual remedies in extreme cases. Of course this does not mean that pharmacists can safely fill prescriptions calling for doses that are obviously fatal; or that where the doses prescribed appear to be unusual the prescription can be safely filled without inquiry of the physician to make sure there has been no error. There is no evidence that this precaution was not taken in the present case; but, even if it was not, that would be immaterial here, because the result of such inquiry would have been to confirm the prescription, as the physician who wrote it testified that it was his unusual prescription in such cases. Id. at 666-67, 158 A. at 13-14. Although we adopted the learned intermediary doctrine in People's Serv. Drug Stores with respect to the ordinary pharmacist-patient relationship wherein the pharmacist merely fills the prescription as ordered by the physician, we decline to extend the doctrine to those cases in which the pharmacy is disseminating information concerning the properties and efficacy of a prescription drug. To extend the defense to the facts of the instant case to insulate the pharmacy from the consequences of its affirmative decision to distribute information and instructions contained that provide direction to the patients in a patient package insert is without legal justification. Therefore, we decline to hold as a matter of law that the learned intermediary doctrine precludes a pharmacy from being held liable for breach of express warranty when it provides a package insert that could provide the basis for such a warranty. We cannot agree with Rite Aid's proposition that Ms. Levy-Gray relied solely on the expertise of Dr. Geckler, her prescribing physician, to describe the appropriate manner in which to take doxycycline as a matter of law. Dr. Geckler testified that he relied on Rite Aid to provide the necessary information to Ms. Levy-Gray. Based on Dr. Geckler's testimony that he did not provide Ms. Levy-Gray with guidance as to the administration of the doxycycline, the jury reasonably could have inferred that Ms. Levy-Gray similarly relied on the information furnished by Rite Aid with respect to doxycycline's characteristics and how it should be taken. Moreover, the jury further could have inferred from the evidence presented at trial that the language contained in the Rite Advice pamphlet encouraged Ms. Levy-Gray to rely on the information contained therein based upon its assertion on the cover that [i]nside is everything that you need to know about your prescription; thus, the statement take with food or milk if upset stomach occurs had the effect of warranting that for the duration of Ms. Levy-Gray's doxycycline treatment the doxycycline will not be adversely affected by her consumption of milk. Based on the facts of the case sub judice, the jury reasonably could have inferred that Ms. Levy-Gray relied on the veracity of Rite Aid's affirmation each time she took the dose of doxycycline with milk.