Opinion ID: 1338009
Heading Depth: 2
Heading Rank: 1

Heading: implied warrant of merchantability

Text: I cannot concur in the majority opinion's holding that without a claim of physical injury to person or property, a plaintiff may not successfully pursue a breach-of-warranty claim. While the term products liability generally brings to mind liability in tort  negligence and strict liability  the third theory of products liability, breach of warranty, is a contract theory. See James J. White, Reverberations from the Collision of Tort and Warranty, 53 S.C. L.Rev. 1067 (2002) (discussing the prevalent and unfortunate misunderstanding of the difference between tort and contract claims in the field of products liability). If the plaintiff asserts that the defendant is liable in tort for a defective product, then of course the plaintiff must prove physical injury to person or property. There is no doubt, however, that a plaintiff who asserts breach of warranty must prove only that his contractual expectations were not fulfilled. See S.C.Code Ann. § 36-2-714 (2003) (titled, Buyer's damages for breach in regard to accepted goods); Gasque v. Eagle Mach. Co., 270 S.C. 499, 502-03, 243 S.E.2d 831, 831-32 (1978) (in a product-liability action involving a claim of breach of warranty under article 2 of the Uniform Commercial Code (U.C.C.), explaining that a buyer need prove only that the goods delivered by the seller were not as promised). In the alternative, the majority opinion finds that even if contract law were applicable, Homeowners in fact received the benefit of their bargain because the anchor system was in fact merchantable. Yet, this finding of merchantability is based on the very fact that the anchor system has caused no physical injury. The majority opinion thereby derogates the principle that goods either conform to the contract upon delivery or they do not. Goods do not become non-conforming only upon causing injury. In my opinion, it must be properly determined in the circuit court whether the anchor system sold by the Anchor Defendants was merchantable under South Carolina Code section 36-2-314. [6] If it was not, then Homeowners are entitled to relief under section 36-2-714. I would reverse the grant of summary judgment to the Anchor Defendants on the merchantability claim. Conversely, the grant of summary judgment to the Home Defendants on the merchantability claim should be affirmed, but not for the reasons cited by the circuit court. First, as stated above, I disagree that Homeowners must prove physical injury to pursue this claim. Second, I disagree with the circuit court that the Home Defendants cannot be liable for breach of warranty because they did not sell the anchor system. [7] Homeowners' claim against the Home Defendants is not that the anchor system was unmerchantable, but rather that the mobile homes sold by the Home Defendants [8] were unmerchantable because of the allegedly flawed anchor system. Homeowners emphasize that under HUD regulation 3280.306(b), the Home Defendants could not sell their mobile homes without providing the installation manual discussed above. According to Homeowners, if the anchor system recommended in the manual failed to meet HUD standards, then the mobile home was unmerchantable. In my opinion, Homeowners improperly focus on the manual's recommendation of this particular stabilizing device. Regardless whether the anchor system fails to meet HUD regulations, is unmerchantable, or both, the important question is whether the mobile homes are fit for their ordinary purpose... to serve as a dwelling. See S.C.Code Ann. § 36-2-314(2)(c). There is no evidence in the record, and Homeowners do not actually allege, that the mobile homes are unfit for that purpose. The only reason that the mobile homes could be unmerchantable on account of the manual would be lack of HUD certification. A HUD approved manual is necessary for any mobile home to be adequately ... labeled as the agreement may require. S.C.Code Ann. § 36-2-314(2)(e) (another test for merchantability). As mentioned above, the Home Defendants' manual was certified by a DAPIA on behalf of HUD. For these reasons, I concur in the majority's affirming the grant of summary judgment to the Home Defendants on the merchantability claim.