Opinion ID: 1957708
Heading Depth: 1
Heading Rank: 1

Heading: Minton's Liability to Hill

Text: The court of appeal correctly determined that Minton should be considered a manufacturer after it rebuilt the machines with all new parts. See Spillers v. Montgomery Ward and Co., Inc., 294 So.2d 803 (La.1974). However, we disagree that redhibition was the proper basis upon which to grant relief. Redhibition is the avoidance of a sale because of some vice or defect in the thing sold. It requires the seller to return the purchase price and the buyer to return the thing purchased. After Capitol sold the two skidders at public auction on August 20, 1978, it could no longer return the skidders to the seller; thus, a redhibition action was no longer available. However, a reduction in price can be granted in this circumstance. To determine the correct amount in which the price should be reduced, one must look to the price which a reasonable buyer would have paid for the thing as warranted by the seller, and to the price a reasonable buyer with knowledge of the defects would have paid. In the case at bar, the original sale price for each skidder when Minton sold to Capitol was $16,905. When Capitol re-sold the skidders at auction, the buyer, who knew of the defects, paid Capitol $8,000 for each skidder. In this case, the Court will accept these sums as reflecting the amounts a reasonable buyer would pay both before and after knowledge of the defects. Although a credit for the purchaser's use of a thing may be awarded in some instances, no such credit is warranted here. Mr. Hill's attempts to use the machines were interrupted frequently by serious and ongoing problems caused by defects in the machines. In Alexander v. Burroughs Corp., 359 So.2d 607 (La.1978), the Court, through Justice Dixon, stated, A credit for a purchaser's use of a product may be proper in certain instances, even in favor of a bad faith seller..... Compensation for the buyer's use, however, ought not be granted automatically by the courts; even the value of an extensive use may be overridden by great inconveniences incurred because of the defective nature of the thing and constant interruptions in service caused by the seller's attempts to repair. Such is the case here and, accordingly, no credit will be awarded for the purchaser's use. Minton will be ordered to reimburse Hill the sum of $8,905 for each skidder representing the reduced value of the skidders. Since a manufacturer is considered a bad faith seller, Hill is entitled to additional relief from Minton. Civil Code art. 2544 provides that an action for a reduction in price is subject to the same rules and limitations as a redhibition action; therefore, C.C. art. 2545, which provides that a bad faith seller is liable for the price, repayment of expenses (including attorney's fees), and damages, should be considered in this case. Minton will be liable for Hill's attorney's fees in all proceedings. However, we disagree with the court of appeal's finding that Minton should be required to reimburse Hill for Capitol's attorney's fees. In an action for redhibition or quanti minoris, a bad faith seller or manufacturer is liable for the purchaser's attorney's fees. In this case the purchaser, Capitol, assigned all its redhibition rights to Hill. Therefore, Minton should be liable for Hill's attorney's fees since Hill now stands in the purchaser's shoes for all redhibition purposes. Minton should not, however, also be required to reimburse Hill for Capitol's attorney's fees. Hill's liability for Capitol's attorney's fees arose out of the lease contract between Hill and Capitol. Minton was not a party to this contract and any provisions in it cannot affect his liability under the redhibition articles. To hold that Minton must reimburse Hill for the attorney's fees Hill owes unto Capitol would, in effect, force Minton to pay the attorney's fees of both the original purchaser and that purchaser's assignee. The assignment of all warranty rights was valid and, from that point forward, Minton was liable only unto Hill in any warranty action. To hold Minton responsible for both Capitol's and Hill's attorney's fees would double the seller's liability for attorney's fees as a result of an assignment which is prohibited under C.C. art. 11. This article, which does not allow two contracting parties to affect the rights of a third person, reads as follows: Individuals can not by their conventions, derogate from the force of laws made for the preservation of public order or good morals. But in all cases in which it is not expressly or impliedly prohibited, they can renounce what the law has established in their favor, when the renunciation does not affect the rights of others, and is not contrary to the public good. Hill will also be allowed to recover from Minton compensation for the actual damages he suffered because of the defects in the skidders. Although the lease contract between Hill and Capitol provided for liquidated damages between those two parties for breach of the lease, this provision is not conclusive as to the actual damages suffered by Hill because of equipment failure. We disagree with that portion of the court of appeal's order basing Hill's damages on this contractual amount. Minton will be cast for the sum of actual damages to be proven by Hill. That amount will be determined by the trial court on remand.