Opinion ID: 2281968
Heading Depth: 1
Heading Rank: 8

Heading: Assignment of Warranty Claims to TEAM

Text: The next inquiry is whether there was a valid assignment of Crush's warranty claims to TEAM. TEAM argues that it was assigned the right to damages belonging to Crushas immediate purchaser and original party to the contractafter Uhlmann received the right as part of Crush's liquidation proceeds. The difference between TEAM's and Renaissance's breach of express warranty claims is that Renaissance purportedly was assigned the warranty itself, with a present right of recovery for an existing breach, whereas TEAM was assigned Crush's action for breach of express warranty, which gives a present right of recovery for a past breach. The present question, then, is whether a right to damages for breach of express warranty arising from the sale of personal property may be assigned to a party not in privity of contract. Section 2-210 of the Missouri UCC authorizes the assignment of a right to damages for contractual breach. The section provides, in pertinent part, as follows: A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise. § 400.2-210.2 (emphasis added). Although Missouri courts have not addressed specifically whether this right to damages for contractual breach contemplates express warranties, the case law in other jurisdictions is persuasive. The Illinois Supreme Court, interpreting a version of UCC section 2-210 identical to Missouri's, has held that where warranty claims have been formally assigned to a successor buyer, an express warranty that is not limited to the first purchaser gives an assignee the right to sue for purely economic loss and consequential damages, even though original vertical privity is absent. Collins, 127 Ill.Dec. 5, 532 N.E.2d at 843. In Collins, the original purchaser of a commercial warehouse received an express warranty from the roofing manufacturer against leakage for ten years. When the warehouse was sold to a subsequent purchaser within the warranty period, the owner formally assigned to the purchaser any rights and causes of action under the manufacturer's warranty. Id., 127 Ill.Dec. 5, 532 N.E.2d at 835-36. Here, as in Collins, there was a document assigning to TEAM any rights of action belonging to Crush, although the document did not specifically mention Vermeer's limited warranty. On June 3, 2004, Uhlmann, Mo-Kan, and TEAM entered into an agreement by which Uhlmann assigned to TEAM all of his rights and interests in Crush/Mo-Kan's liquidation proceeds. Nothing in the written warranty prohibited assignment of the warranty claim. Under section 400.2-210.2, assignments are encouraged unless the parties expressly provide otherwise. See 1 Clark & Smith, The Law of Product Warranties § 10-12. Giving TEAM the benefit of all reasonable inferences, the evidence is sufficient for a jury to find a valid assignment of Crush's warranty claims to TEAM.