Opinion ID: 578620
Heading Depth: 2
Heading Rank: 1

Heading: Breach of the Implied Warranties

Text: 9 The district court concluded that the defendant breached its implied warranties of merchantability and fitness after finding that the system generally failed to operate in a reliable manner at plaintiffs' Bethlehem location. In support of its conclusion, the district court stated that it need not identify any specific defect in order to show that the equipment did not perform as goods of its kind should. Defendant asserts that the district court misconstrued the law relating to the amount of evidence required to establish a breach of the implied warranties. Specifically, defendant contends that plaintiffs failed to prove by a preponderance of the evidence any defect in the equipment it manufactured and supplied. 10 Both the implied warranty of merchantability and the warranty of fitness for a particular purpose arise by operation of law and serve to protect buyers from loss where the goods purchased are below commercial standards or are unfit for the buyer's purpose. Vlases v. Montgomery Ward & Co., 377 F.2d 846, 849 (3d Cir.1967). In order to be merchantable, goods must be fit for the ordinary purposes for which such goods are used. 13 Pa.C.S.A. § 2314(b)(3). The warranty of fitness for a particular purpose is more exacting. It requires that the seller had reason to know of the buyer's particular purpose at the time of contracting and that the buyer was relying on the seller's expertise. In that case, the goods are implicitly warranted to be fit for that particular purpose. 13 Pa.C.S.A. § 2315. To establish a breach of either warranty, plaintiffs must show that the equipment they purchased from defendant was defective. 11 One way to demonstrate a defect is by the submission of circumstantial evidence. Greco v. Bucciconi Engineering Co., 407 F.2d 87, 89-90 (3d Cir.1969); MacDougall v. Ford Motor Company, 214 Pa.Super. 384, 257 A.2d 676, 679-80 (1969), overruled by implication on other grounds, REM Coal Co., Inc. v. Clark Equipment Co., 386 Pa.Super. 401, 563 A.2d 128 (1989). Under Pennsylvania law a product may be found defective if it functioned improperly in the absence of abnormal use and reasonable secondary causes. Greco, 407 F.2d at 89-90. We believe that plaintiffs were required to shoulder the burden not only of demonstrating a malfunction, but of negating abnormal use and other causes. Id. at 89-90 & n. 3; see also Brill v. Systems Resources, Inc., 405 Pa.Super. 603, 592 A.2d 1377, 1379 (1991). Therefore, in order to carry their burden plaintiffs were required to show: (1) that the product malfunctioned; (2) that plaintiffs used the product as intended or reasonably expected by the manufacturer; and (3) the absence of other reasonable secondary causes. 12 The district court made several findings of fact regarding the improper functioning of the system. It found that plaintiffs experienced communications failures after installation; that there were major problems with the transmitter; and that after making the modifications suggested by defendant, the system still failed. These findings based on the evidence presented by plaintiffs are supported on the record: (1) by the testimony of Lubsen, the owner and president of plaintiffs, (2) by one subscriber's computer printout showing system failures four out of fifteen days in May of 1987, and (3) by the FCC notice. Under the clearly erroneous standard, it is evident that there was sufficient evidence for the district court to conclude that the system malfunctioned. Thus, plaintiffs met their burden as to the first requirement. 13 Turning to the remaining elements of a breach of warranty claim, defendant does not contend that plaintiffs failed to negate the second burden placed on them, i.e. the possibility of abnormal use of the system. It does argue, however, that the communication failures may be traceable to a number of other factors beyond its control which plaintiffs did not eliminate in their case in chief. Thus, defendant asserts that plaintiffs selected an inferior radio tower, may have improperly installed the system, or failed to make the suggested modifications. Additionally, it states that the frequency assigned by the FCC may have been incompatible with the requirements of a radio security system. Bateman, defendant's agent, also testified as an expert witness to a variety of other factors that could inhibit the effectiveness of the system. 14 Lubsen, testifying in plaintiffs' case in chief, stated that plaintiffs selected the WFMZ tower after hiring an outside firm to evaluate the options. Each option had its own advantages and disadvantages. Plaintiffs knew that placing the antenna on the WFMZ tower would decrease the effective range of the system due to line loss. In order to combat this problem, however, plaintiffs utilized a superior cable. Selection of the WFMZ tower permitted plaintiffs to place the antenna at the highest point available in the area to increase range. Lubsen testified that the decision to use this tower comported with defendant's advice to place the antenna as high as possible. Further, Lubsen explained that the directional placement of the antenna corresponded to the locations of existing and anticipated subscribers. 15 Lubsen also testified regarding the installation of the system. A specialist installed the antenna on the tower and plaintiffs did the rest of the work themselves after observing Bateman's installation of the Commonwealth system. Lubsen's testimony revealed, and Bateman confirmed, that defendant agreed to check installation and to assist in correcting any existing problems. 16 The district court could reasonably have inferred that plaintiffs properly installed the system based on the following evidence. First, Lubsen testified that although plaintiffs did not have the expertise to do repairs on such a system, they were accustomed to installation work. Lubsen also testified that he thought that defendant believed that everything appeared to be installed correctly at the tower site based upon what he was told by defendant's agents. Finally, the only problem Bateman identified on the subscriber's premises was the location of the antenna and its angle. Lubsen testified that in accord with Bateman's suggestion, plaintiffs relocated the subscriber's antenna to the top of the building. Thus, the record made by plaintiffs reasonably supports an inference that the failure was not caused by improper installation or an inferior tower. 17 Defendant also asserts that the offset frequency could have been a likely source of the problem. It informed plaintiffs soon after Bateman's visit that the frequency it had recommended and helped to obtain could be to blame for the malfunctions. The evidence showed plaintiffs' belief that defendant had initiated the process of obtaining a new frequency. Lubsen testified that despite defendant's promise to initiate the process for an alternative frequency, defendant never accomplished the task. 18 Pennsylvania law does not require that plaintiffs refute all possible explanations offered by a defendant. Lenkiewicz v. Lange, 242 Pa.Super. 87, 363 A.2d 1172, 1175 (1976), superseded on other grounds, Leaphart v. Whiting Corp., 387 Pa.Super. 253, 564 A.2d 165 (1989). In Cuthbert v. Philadelphia, 417 Pa. 610, 209 A.2d 261 (1965), the Pennsylvania Supreme Court stated: 19 [I]t is not necessary that plaintiff prove with mathematical exactness that the accident could only have been caused in one manner to the exclusion of all other possibilities ... but he must eliminate those other causes, if any, as were fairly suggested by the evidence.... 20 Id., 209 A.2d at 263-64 (citations omitted). Thus, plaintiffs carried their burden of demonstrating the existence of a malfunctioning product in the absence of abnormal use and reasonable secondary causes.