Opinion ID: 1934176
Heading Depth: 1
Heading Rank: 6

Heading: Shifting Burden in Summary Judgment.

Text: The party moving for summary judgment has the burden to show that no genuine issue of material fact exists and must produce sufficient evidence to demonstrate that the moving party is entitled to judgment as a matter of law. Kaiser v. Millard Lumber, 255 Neb. 943, 587 N.W.2d 875 (1999). A prima facie case for summary judgment is shown by producing enough evidence to demonstrate that the movant is entitled to a judgment in its favor if the evidence were uncontroverted at trial. Id. After the movant makes a prima facie case for summary judgment, the burden to produce evidence showing the existence of a material issue of fact that prevents judgment as a matter of law shifts to the party opposing the motion. Boyle v. Welsh, 256 Neb. 118, 589 N.W.2d 118 (1999). Statute of Limitations Under Neb. U.C.C. art. 2. The parties agree that the underlying transaction in this case is a contract for the sale of goods subject to Neb. U.C.C. art. 2. Nebraska Popcorn's petition asserts a breach of warranty claim in connection with that transaction. The statute of limitations applicable to contract claims under the Nebraska Uniform Commercial Code is set forth in § 2-725. Section 2-725(1) and (2) provides as follows: (1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it. (2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered. The foregoing statute by its terms provides that an action for breach of contract must be brought within 4 years after the cause of action has accrued and that the cause of action accrues when the breach occurs § 2-725(1) and (2). It further provides that a breach of warranty generally occurs when tender of delivery is made § 2-725(2). The statute makes an exception to the commencement of the 4-year period at the time of delivery in § 2-725(2) where the warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance. Id. In such a case, the cause of action accrues when the breach is or should have been discovered. Id. This court has long held that in order to meet the exception based on a warranty of future performance, the warranty must be an express rather than an implied warranty and that the warranty must explicitly extend to future performance. Murphy v. Spelts-Schultz Lumber Co., 240 Neb. 275, 481 N.W.2d 422 (1992); Grand Island School Dist. #2 v. Celotex Corp., 203 Neb. 559, 279 N.W.2d 603 (1979). In Celotex Corp., we rejected the argument that a bond in which the surety guaranteed that it would repair leaks in a roof for 20 years constituted an explicit warranty of future performance of the roofing materials. In Celotex Corp., we stated that the exception contained in § 2-725(2) applies only where the seller explicitly states, for example, that the product will `last for 10 years.' (Emphasis in original.) 203 Neb. at 568, 279 N.W.2d at 609. Similar to our holding in Celotex Corp., which was limited to a bond providing a guarantee to repair, the majority of other jurisdictions have found that a warranty given by a manufacturer or seller to repair or replace does not constitute an explicit warranty of future performance of goods for purposes of § 2-725(2), and therefore the promise to repair or replace does not extend the commencement of the running of the statute of limitations. Tittle v. Steel City Oldsmobile GMC, 544 So.2d 883 (Ala.1989) (repair or replace language does not guarantee that goods will perform free of defects; rather, it anticipates that defects will occur); Boyd v. A.O. Smith Harvestore Products, 776 P.2d 1125 (Colo.App. 1989) (unlike warranty to repair or replace, warranty of future performance does not assume that product will not perform and will need repair or replacement); Flagg Energy Devel. v. General Motors, 244 Conn. 126, 709 A.2d 1075 (1998) (repair or replacement clause provides buyer no relief other than that expressly promised and is not promise of future performance); Centennial Ins. v. General Electric, 74 Mich.App. 169, 253 N.W.2d 696 (1977) (repair or replace language is specification of remedy and does not explicitly state warranty of future performance); Liecar Liquors v. CRS Business Computers, 205 A.D.2d 868, 613 N.Y.S.2d 298 (1994) (warranty expressly limited to repair or replacement would not be warranty which extended to future performance of goods); U.S. Marine Corp. v. Kline, 882 S.W.2d 597 (Tex.App. 1994) (repair or replace language provides a remedy if goods fail and does not explicitly extend to future performance; future performance exception is construed narrowly, with emphasis on term explicitly). But see Wienberg v. Independence Lincoln-Mercury, 948 S.W.2d 685 (Mo.App.1997) (finding under Missouri law that repair or replacement language does not nullify future performance warranty, but, rather, limits remedy for breach of warranty of future performance to repair or replacement). Cases such as the foregoing generally reason that the future performance exception in § 2-725(2) should be narrowly construed to include only those warranties that explicitly guarantee the proper performance of goods for some period of time into the future. A warranty to repair or replace does not guarantee proper performance. Rather, it anticipates potential defects and specifies the buyer's remedy during the stated period. We agree with the rationale of the foregoing cases and extend our reasoning in Celotex Corp. to hold that a warranty to repair or replace, without more, is not an explicit warranty of future performance and will not extend the commencement of the 4-year statute of limitations set forth in § 2-725(1). For the sake of completeness, we note that under an unusual set of facts in which the parties stipulated that the description of goods as siding carried with it the representation that the goods would last the lifetime of the house, we stated that an express warranty may arise under Neb. U.C.C. § 2-313 (Reissue 1992) from a description of the goods which becomes a part of the basis of the bargain. Moore v. Puget Sound Plywood, 214 Neb. 14, 332 N.W.2d 212 (1983). In the circumstance in which a buyer claims that a warranty has been made part of the basis of the bargain, the buyer must prove reliance upon the warranty to extend the commencement of the 4-year statute of limitations of § 2-725(1). Hillcrest Country Club v. N.D. Judds Co., 236 Neb. 233, 461 N.W.2d 55 (1990). Our holding in the instant case does not alter the holdings in these cases.