Opinion ID: 393715
Heading Depth: 3
Heading Rank: 1

Heading: CMI's Representations

Text: 32
33 ViCon says CMI falsely represented, through its advertising literature (specifically its dryer specification sheet) and the oral representations of its salesmen, that its asphalt plant would produce 200 tons of asphalt per hour. 34 CMI denies making any misrepresentations concerning plant production capabilities and says that neither the dryer sheet nor its salesmen's oral representations establish the claimed misrepresentation. Because the dryer sheet refers only to dryer capacity not total production, CMI says ViCon's reliance thereon is misplaced. Assuming arguendo that the dryer sheet relates to total plant production, CMI says ViCon introduced no evidence that the dryer did not perform as represented. 35 It is undisputed that the plant achieved an average production rate of only 145 tons per hour. The Master found the average moisture content of the aggregate used to have been 6%, a level at which the dryer sheet states it will dry 184-244 tons per hour. That finding was based on two written reports of moisture tests conducted by an independent testing inspector showing: (1) a 6.47% moisture content on the day following a 1.16 inch rainfall and (2) a 4.94% moisture content, a month and a half later and on the inspector's deposition testimony that in numerous other unrecorded tests, the moisture content never exceeded 6%. Though CMI urges that the Master erred in relying on this testimony, its only attempt at rebuttal was through its own chief engineer who testified, based on his calculations of ViCon's average fuel consumption for one of its jobs over a 6 month period, that the average moisture content was 10%. That testimony was subsequently discredited: 36 Q. So your ten percent moisture that you come up with is a result that you wanted to reach rather than what your own calculations showed it to be, isn't that correct? 37 A. That's right. 38 Moreover, CMI's own tests in November, 1973 showed an aggregate with a moisture content of 4.2%. CMI urges that asphalt production is a function of variables other than dryer efficiency, such as cycle time 8 and hauling efficiency, 9 but there is no evidence that those factors significantly affected the average hourly production rate of the plant. In fact, CMI states in its advertising literature that the drying process is at the heart of efficient asphalt production and that while all components of an asphalt plant affect its production, the most common bottleneck is dryer performance. 39 Regarding oral representations, CMI says that if Jones represented plant production to be 200 tons per hour, ViCon is not entitled to rely thereon because Mann knew that Jones was not aware of all the variables involved in ViCon's asphalt production. Again, CMI's difficulty lies in the absence from the record of evidence to support its position. To the contrary, CMI's own witnesses testified at trial that its general advertising is designed to create in prospective purchasers certain expectations regarding the product and that such purchasers have a right to rely on its representations. 40 Finally, CMI contends that because ViCon's records show that the plant did produce at a rate of 200 tons per hour on 15 of the 477 production days, approximately 3% of the time, the plant had that inherent capacity and its representation was therefore true. CMI's contention is disingenuous. Judge Nixon found that CMI's production representations related to sustained rates of production, and that finding is amply supported by the evidence of record. That the plant operated at 200 tons per hour on 3% of its production days is no indication that the plant was capable of sustained performance at that rate. In fact, substantial evidence established that the plant was not capable of such sustained performance. 41
42 Judge Nixon also found that CMI had falsely represented that the plant would be free of serious defects and would have a low maintenance cost. 43 CMI does not deny that it made those representations or that ViCon suffered mechanical failures. Nor does CMI deny that those failures were attributable to defective material, except with respect to the wet wash exhaust system. 10 Instead, CMI maintains that because the maintenance costs were lower than the industry average, that error occurred in the finding that those expenses were excessive. We disagree. 44 ViCon's uncontroverted testimony establishes that it incurred expenses of $129,170.55 for parts and labor to correct defective conditions in the plant over and above its normal repair and maintenance costs. That figure clearly establishes the excessive cost of maintaining the plant. 45 Regarding the wet wash system, CMI says its premature wear is attributable to corrosion caused by ViCon's method of operation, not by any defect in the system itself. ViCon says the wear resulted from abrasion by an excessive number of fine sand particles (fines) being pulled through the system. In light of the extensive testimony on the subject, Judge Nixon's finding that both factors contributed to wear, but that the primary cause was abrasion, cannot be held clearly erroneous. ViCon's engineering expert testified without contradiction that excessive fines were present in the system. Moreover, CMI admitted that during the early stages of the plant's operation, excessive dust was carried through the exhaust system. 46 Judge Nixon properly found that CMI falsely represented the plant's production capability and its maintenance and repair costs. Because those representations are clearly material to prospective purchasers of hot mix asphalt plants and of such character as to influence a purchase of such plants, we conclude, as did Judge Nixon, that each of the elements of tortious misrepresentation is present and that ViCon is entitled to recover thereon.