Opinion ID: 1767013
Heading Depth: 1
Heading Rank: 5

Heading: Mercury's express warranty failed of its essential purpose.

Text: ¶ 36. Mercury expressly warranted that Travis's new motors would be free from defects in material and workmanship and also provided a limited replace and repair remedy to Travis in the event of a defect. The warranty was effective through February of 1999. It reads: Our obligation under this warranty shall be limited to repairing a defective part, or at our option, refunding the purchase price or replacing such part or parts as shall be necessary to remedy any malfunction resulting from defects in material or workmanship as covered by this warranty. Additionally, Mercury advised in its warranty package that: Claim shall be made under this warranty by delivering the Product for inspection to a Mercury Marine dealer authorized to service the Purchaser's Product. If purchaser cannot deliver the Product to such authorized dealer, he may give notice in writing to the company. We shall then arrange for the inspection and repair, provided such service is covered under this warranty. Purchaser shall pay for all related transportation charges and/or travel time. ¶ 37. The essential purpose of a repair and replacement warranty such as this is to provide confidence and assurance to the buyer that he will secure goods conforming to the contract, and to provide a limitation of liability to the seller. [1] Royal Lincoln-Mercury Sales, Inc. v. Wallace, 415 So.2d 1024, 1028 (Miss.1982). Under Section 75-2-719(2), such a warranty fails of its essential purpose if the seller is unwilling or unable to repair or replace the product or if there is unreasonable delay in repair or replacement of product. See, e.g., Riley v. Ford Motor Co., 442 F.2d 670 (5th Cir.1971). Indeed, if the seller does not or cannot correct the defect within a reasonable amount of time, the buyer is deprived of the substantial value of his bargain. See, e.g., Mercedes-Benz of North America, Inc. v. Dickenson, 720 S.W.2d 844 (Tex.App.1986); see, e.g. Riley v. Ford Motor Co., 442 F.2d at 673 (jury was justified in finding that the warranty deprived the buyer of the substantial value of the bargain where buyer returned the defective car once and warrantor was unable to correct the defects). This bargain deprivation is the thrust of the essential purpose doctrine of Section 75-2-719 of the UCC. [2] In yet other cases, repair may not be acceptable because the consumer may have an immediate need for the goods. In such cases, the limited remedy would seem to fail its essential purpose. The analysis here follows accordingly. ¶ 38. In the present case, Mercury provided its repair or replace remedy as Travis's only remedy in the event of a motor defect. As such, it must have provided Travis with the benefit of his bargain under the circumstances. The circumstances of this case are therefore determinative of whether the warranty failed of its essential purpose. ¶ 39. Although Travis maintained Pro Team status with Mercury, Mercury contends that this status did not provide Travis with more than Mercury's standard consumer warranty protection or remedies. Mercury so informed Travis in both the warranty package and Mercury's Promotional Motor Program. In other words, Mercury contends that Travis's expectations under the circumstances could be no different than that of any other buyer. The jury obviously found Mercury's argument without merit. ¶ 40. The facts of this case, as well as the jury verdict, indicate that Mercury knew Travis was no average consumer; nor was the transaction between them ordinary. Indeed, communications leading up to the transaction make this clear. ¶ 41. First, as the record indicates, [t]his is a case where as an integral part of the sale of the motors, Travis committed to fish for and promote Mercury as set forth in the Promotional Agreement, which was agreed upon as follows: As a condition of being considered for the Mercury Marine promotional program, I agree to provide the following support to Mercury Marine and/or my dealer. I agree to wear promotional clothing provided to me by Mercury Marine at any public speaking event such as but not limited to, tournaments, boat shows, seminars and other programs. Every effort will be made to include the outboard in any press photo opportunity. I will make no changes in the appearance of the outboard without consent of Mercury Marine. I will provide copies annually of articles, photographs, or news clippings which identify me as a Saltwater Pro Team member to Mercury Marine for future team membership evaluation. I agree to provide, upon request, a minimum of two days of promotional activity or guiding, as appropriate at no charge. This activity may be requested by Mercury Marine and/or my dealer. I will provide the right to use my name, voice, biographical material, photography or other likeness to promote Mercury Marine products. ¶ 42. This piece of evidence alone is sufficient to lead a trier of fact to conclude that Mercury provided the motors to Travis for use in time-sensitive, competition fishing, during which Travis was required to promote Mercury Marine. ¶ 43. Second, the selected motors at issue were to be promotional proof of their reliability. In fact, Mercury specifically selected them for Travis over other motors because they were tried and tested. Mercury also promised to pre-run them before they were shipped to ensure they were tournament ready when they were installed on Travis's boat. They were not ready, however. Mechanical problems arose immediately; and Travis spent the better part of two days at the outset traveling throughout North Carolina to have the motors repaired and installed. Additionally, Travis was denied any repair or replacement during the Cypress Cove tournament. ¶ 44. Indeed, not only were these motors continuously in need of repair during the competition season, in the final case of motor failure, while thirty miles out at sea, Travis contacted Mercury for assistance, and Mercury did nothing, except advise Travis to find a dealer the following weekafter the tournament. Given the nature of the bargain between the parties, however, the jury obviously reasoned that Mercury's warranty was inadequate because it left Travis without any remedy under the sensitive circumstances of tournament fishing for which Mercury knew the motors were purchased. This warranty, indeed, left Travis out to sea. ¶ 45. Accordingly, upon proper instruction from the court, the jury concluded that Mercury's limited warranty failed of its essential purpose. During legal arguments below as to the jury instruction, the judge stated to counsel, as the majority points out: I am prepared to instruct the jury that the specific warranty here and limitations in the warranty failed of its essential purpose because under the facts of this case, the Mercury warranty did not do Mr. Travis or Clear River any good when he was out there in the middle of the ocean trying to engage in tournament fishing, and the engines went out or either didn't work to start with or went out in the middle of tournaments. The majority responds to this statement by stating that [r]easoning that a motor malfunction in the ocean justifies an instruction on failure of essential purpose is untenable. Such a response itself may be tenable if the justification which the majority invents were accurate. The judge's statement indicates that such an instruction would be based on multiple facts indicating the warranty was no good when both of the engines either went out or didn't work to start with or went out in the middle of tournaments. In fact, the judge recognized, as the majority fails to do, that there was more than one malfunction, whether in the middle of the ocean or otherwise. ¶ 46. Accordingly, the judge instructed the jury as follows: The court instructs the jury that the limited warranty contained in the written warranty given to Clear River by Mercury Marine is the exclusive remedy available to Clear River unless you find by a preponderance of the evidence that the limited warranty operates to deprive either party of the substantial value of the bargain. The Limited warranty fails of its essential purpose if Mercury Marine was unwilling to repair or replace the defective powerhead or if the engine was unrepairable or if Mercury Marine unreasonably delayed in repairing or replacing the powerhead. ¶ 47. The majority goes on, however, to ignore the bargain deprivation analysis upon which the essential purpose doctrine is based, to hinge the failure of the warranty upon the one instance of motor failure in Louisiana. Citing Tacoma Boatbuilding Co. v. Delta Fishing Co., 28 U.C.C. Rep. 26 (W.D.Wash.1980), the majority holds that [m]erely because a boat's engine fails in the ocean, the very place it is supposed to operate, does not mean that the limited warranty of repair or replacement fails of its essential purpose. Credit is to be given to the majority for its keen insight on this point. But this is not the reason the present warranty failed, or why any warranty would fail. The warranty failed because it deprived Travis of the benefit of his bargain given the circumstances pursuant to which that bargain was made. ¶ 48. The majority also concludes that there is no evidence of repeated attempts by Mercury Marine to correct defects and the repeated failure to do so. Without defining specifically what repeated means, there were five individual attempts to repair in this case, only three of which were successful, and one of which came after the agreement between these parties became the subject of this lawsuit. ¶ 49. The jury was fully informed of the circumstances of the bargain made in this case, the repeated failures of the motors, the repair attempts, both successful and not, and the usefulness of the warranty in general and in the final instance of motor failure. It found that Mercury's limited warranty was inadequate and/or Mercury failed to reasonably act upon it, and therefore decided according its instructions on the law, that the warranty failed of its essential purpose because it deprived Travis of the benefit of his bargain. [3] The jury verdict coincides with reality on this issue. The majority opinion does not.