Opinion ID: 4276627
Heading Depth: 2
Heading Rank: 2

Heading: The Purchase Price

Text: The general measure of damages for breach of warranty is “the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted.” MISS. CODE ANN. § 75-2-714(2). This requires proof of the value as warranted and as accepted. See § 75-2-714(2). The burden of proof is on the buyer seeking damages. Gast v. Rogers-Dingus Chevrolet, 585 So. 2d 725, 731 (Miss. 1991) (“This burden cannot be met by mere conjecture or inferences unsupported by adequate evidence.”). The district court found that it was “far from clear that the CEMS were worthless.” However, Steel asserts that it proved the CEMS were worthless as accepted because they were unrepairable. Steel relies on Fedders Corp. v. Boatright, 493 So. 2d 301 (Miss. 1986), to argue that, under Mississippi law, proof that a good is unrepairable constitutes proof of worthlessness at the time of acceptance. Such an argument is contrary to the language of Fedders. Fedders dealt with a broken heating system. Id. at 303. There, the court stated, “If the heat pump could not be repaired and was worthless, the [plaintiff] under § 75-2-714 would have been entitled to a refund of the purchase price.” Id. at 309. Contrary to Steel’s assertion, “could not be repaired and was worthless” is not the same as “the goods were worthless because they could not be repaired.” (emphasis added). While it is true that an unrepairable 4 Case: 17-60298 Document: 00514478140 Page: 5 Date Filed: 05/18/2018 No. 17-60298 good may also be worthless, it does not follow that such a good is always worthless. Mississippi law makes clear just who bears the burden to prove worthlessness. In Gast v. Rogers-Dingus Chevrolet, 585 So. 2d 725 (Miss. 1991), the Supreme Court of Mississippi required a buyer to show proof of the value of the goods as accepted, especially where the buyer retained some value. The Gasts purchased a car that required constant repairs and even caught fire. Id. at 727–28. After trying to trade in the car, the Gasts gave it to the bank–– which reduced their outstanding loan. Id. at 727. The Gasts sued the dealer for breach of an implied warranty. Id. at 727. The jury awarded damages, but the trial court set aside the award for, among other things, failure to prove damages. Id. On appeal, the Gasts argued “evidence establishing the purchase price paid for the vehicle, and inferences from the evidence . . . support[ed] their theory that the defective vehicle was essentially valueless.” Id. 730–31. The Supreme Court of Mississippi found the approach “flawed,” explaining: The [buyer] offered no evidence to show either the amount received by the bank from the sale of the vehicle and applied for the benefit of the [buyer] to their note, or the value of the vehicle at the time of its sale. This is not sufficient to support an award of damages under § 75-2-714. Id. at 730. Thus, a buyer must prove the value as accepted and cannot do so by relying on “inferences from the evidence” that the good is “essentially valueless.” See id. (“Having failed to submit requisite proof of damages, no recovery was permissible under 75-2-714.”). Here, the district court found Steel did not prove that the CEMS were worthless at the time of acceptance. A review of the record supports this finding. In fact, the evidence shows Steel retained at least some value from the CEMS. Bryan Vogel, one of Steel’s engineers, testified Steel received $23,340 5 Case: 17-60298 Document: 00514478140 Page: 6 Date Filed: 05/18/2018 No. 17-60298 in credit for components of the Altech CEMS. Thus, an award of the full purchase price would not only relieve Steel of its burden, but would result in its unjust enrichment to the tune of at least $23,340. A buyer cannot meet its burden by only proving half of the equation; the value of the good as accepted must also be proven. See Gast, 585 So. 2d at 731. The district court did not err by denying Steel its purchase price.