Court Opinion

ID: 9691555
Source: CourtListenerOpinion
Date Created: 2023-08-24 20:39:05.687056+00
Date Added: 2024-06-11T18:19:22.533922
License: Public Domain

MILLER, Chief Justice
(concurring in part and dissenting in part).
[¶ 52.] I dissent as to issues 2 (involving a claimed warranty of fitness for a particular purpose) and 3 (relating to an implied warranty of good faith and fair dealing).
[¶ 53.] 1. Fitness for a particular purpose.
[¶ 54.] I would hold that in accepting the evidence which is most favorable to Diamond Surface, as we must, the trial court incorrectly granted a directed verdict on the issue of fitness for a particular purpose.
[¶ 55.] Under our standard of review for a directed verdict, “[t]he evidence must be accepted which is most favorable to the non-moving party and the trial court must indulge all legitimate inferences therefrom in his favor. If sufficient evidence exists so that reasonable minds could differ, a directed verdict is not appropriate.” Bland v. Davi*166son County, 1997 SD 92, ¶26, 566 N.W.2d 452,460 (emphasis added).
[¶ 56.] As the majority opinion recognizes, three elements must be met for a claim of breach of the implied warranty of fitness for a particular purpose:
1. The seller must have reason to know the buyer’s particular purpose.
2. The seller must have reason to know that the buyer is relying on the seller’s skill or judgment to furnish appropriate goods.
3. The buyer must, in fact, rely upon the seller’s skill or judgment.
[¶ 57.] The majority opinion states at ¶ 31 that “[t]here is no evidence that Diamond Surface communicated to SDCP a purpose other than general highway construction or that slip-form paving is a particular use thereby implicating the implied warranty for a particular purpose.”
[¶ 58.] I will initially address the majority opinion’s assertion that there is no evidence that slip-form paving is a particular use within the meaning of SDCL 57A-2-315. First, I respectfully submit that the majority opinion does not even address this as an issue. The opinion, at ¶ 31, discusses only that the seller must have reason to know the buyer’s particular purpose, and never discusses what constitutes a particular purpose.
[¶ 59.] I would hold that Diamond Surface presented evidence to establish that slip-form paving is a “particular purpose.” It has been stated that:
A particular purpose within the scope of [SDCL 57A-2-315] is a use to which the goods are not ordinarily put. The Official Code Comment makes the distinction between the ordinary use of shoes and a buyer’s intention to use shoes for mountain climbing as illustrating a particular purpose of the buyer; however, when shoes are sold as mountain climbing shoes then-use for that purpose is not a use for a particular purpose.
3A Anderson, Uniform Commercial Code, Sales § 2-315:95 (3d Ed.1995); see also Wilson v. Marquette Electronics, Inc., 630 F.2d 575, 581 (8th Cir.1980) (holding that the use of a computer-assisted electrocardiograph system in an office rather than a hospital was a novel use for the equipment and gave rise to an implied warranty of fitness for a particular purpose); Lanphier Constr. Co. v. Fowco Constr. Co., 523 S.W.2d 29, 41 (Tex.Civ.App.1975) (holding that the use of asphalt to pave parking areas and driveways was a “particular purpose”). The use of cement for slip-form paving is likewise a particular purpose, as the methods used in pouring it are unique from the general use of cement.
[¶ 60.] I also would hold that in accepting the evidence most favorable to Diamond Surface, a jury question exists as to whether SDCP had “reason to know” of the particular purpose. I must first emphasize that Diamond Surface was not required to directly inform SDCP of its particular purpose. See 67A Am.Jur.2d Sales § 777 (1985) (stating that “[i]t is immaterial how the seller acquired knowledge of the buyer’s particular purpose; such knowledge can be inferred from past dealings or conduct as well as communicated.” (collecting cases)). There was evidence that Diamond Surface received a price quote from SDCP for this project and it was generally understood that this was a slip-form paving project. While the evidence may be weak, it surely exists to at least establish a jury question as to whether SDCP had “reason to know” this was a slip-form paving project.
[¶ 61.] I would also hold there is adequate evidence on the last two factors under a fitness for a particular purpose claim to at least allow a jury to decide the matter. There was testimony from one of SDCP’s employees that he was aware that its customers rely upon it for the technical knowledge and expertise to provide a product that is suitable and fit for their needs. Therefore, there is sufficient evidence to support the claim that SDCP had reason to know Diamond Surface was relying on it to provide suitable cement for this slip-form paving project. There was also testimony to support the claim that Diamond Surface did indeed rely on SDCP’s skill or judgment. Terry Kraemer, owner of Diamond Surface, testified that he relied on SDCP to provide suitable cement for that particular project.
[¶ 62.] In accepting the evidence most favorable to Diamond Surface, there is clearly a jury question as to whether the implied warranty of fitness for a particular purpose was breached. It should be up to a jury to *167place weight on the evidence, not the trial court. The jury was seated, sworn and prepared to render a decision. It should have been given the opportunity.
[¶ 63.] 2. Implied covenant of good faith and fair dealing.
[¶ 64.] While I agree with the majority opinion that SDCL 57A-1-203, the implied covenant of good faith and fair dealing, does not support an independent cause of action, I would reverse on this issue given my disposition of issue 2. I would hold that the obligation to act in good faith is tied to the duties arising under the warranty of fitness for a particular purpose claim. As SDCL 57A-1-203 states: “Every contract or duty within this title imposes an obligation of good faith in its performance or enforcement.” (Emphasis added.) Therefore, it is a jury question if this “good faith” standard was adhered to by SDCP under Diamond Surface’s warranty of fitness for a particular purpose claim.
[¶ 65] I am authorized to state that Justice SABERS joins in this special writing.