Court Opinion

ID: 9788724
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:16:40.644221+00
Date Added: 2024-06-11T07:37:16.250467
License: Public Domain

Chief Justice TROUT,
dissenting.
Because I believe the Court is misapplying the provisions of the UCC, I respectfully dissent from section C.l of the Court’s opinion.
The Court relies on Section 28-2-713 of the Idaho Code to conclude that the Kellers, who rightfully rejected a 7¡¿-ton dehumidifier because it did not accomplish the warranted purposes for which they had contracted with Inland Metals, are entitled only to incidental and consequential damages and are not entitled to the value of the difference between the contract price of that 7/6-ton dehumidifier and the market price of one that would have accomplished the purpose of the contract, as the trial court found. I believe that given the facts of this case and the language and purpose of the UCC, the Kellers are in fact entitled, according to § 28-2-713, to the additional damages found by the trial court.
The Kellers and Inland Metals came to a clear meeting of the minds as to what would constitute a “conforming good” in the language of the UCC. The Kellers simply wanted a dehumidifier that would clear the humidity and odor from their athletic club. They relied on the skill and expertise of Inland Metals to determine what size dehumidifier would be required to accomplish this task. After making its own calculations and determinations, Inland Metals submitted a bid to install a dehumidifier that it expressly warranted would meet the Kellers’ needs.4 The Kellers rightfully regarded the underlying purpose of the contract — that the dehumidifier would solve the humidity problems in their athletic club — as the basis of the bargain.5 When, after delivery, the Kellers saw *242that this dehumidifier was not accomplishing the requirements of the contract, they rightfully rejected, as the Court’s opinion indicates.
However, the Court bases its decision to reduce the trial court’s damages award on a reading of § 28-2-713 that entirely disregards the basis of the bargain. This Court finds that the market price under § 28-2-713 can only be the going price of a 7/£-ton dehumidifier and not the cost of the dehumidifier Inland Metals warranted it would deliver. This logic excludes from consideration the fact that the whole purpose of §§ 28-2-713, 28-2-712, and 28-2-711 — all sections upon which the Court relies — is to allow the buyer to put himself in as good a position as if the buyer had received the benefit of the bargain.6
By severing the underlying purpose of the contract and, instead, focusing only on the value of the 7/^-ton dehumidifier simply because it is listed in the written contract, the Court obviates the need to enter into this analysis in the first place. If all the parties had contracted for was a 7jé-ton dehumidifier, and if all Inland Metals had been required to provide was a 7)£-ton dehumidifier, then the Kellers would have been wrong in the first place to reject such goods and Inland Metals should have prevailed below and on appeal.7 The Court’s opinion finding that there was a breach of an express warranty is a direct contradiction to the later conclusion that the Kellers received the only thing to which they were entitled, a 7]£-ton dehumidifier.
The underlying policy behind the buyer’s remedies in the above-cited sections is to give the'buyer an opportunity to receive the benefit of the bargain. The UCC operates on the principle of expectation damages as evinced by these and other provisions.8 One of the clearest manifestations of this is the option of cover, which the Court ironically relies upon greatly in its reasoning. The Court’s opinion cites Hawkland in explaining that the damage remedy provided by Section 2-713 “ideally should yield the same recovery as [cover] ... because the cover price is simply another way of conclusively stating what the market price is.” I would readily agree with this principle, and applying it to the facts of this ease, had the Kellers covered, they would have purchased a 10 ton dehumidifier — one that fulfilled the requirements of their contract with Inland Metals — and obviously not a 7/é-ton dehumidifier, which'they already knew did not fulfill this requirement. Additionally, the Court’s opinion states that if the buyer covers, he must do it by making a reasonable purchase “of goods in substitution for those due from the seller.” Again I agree. Had the Kellers covered, they would undoubtedly not have purchased a 7/é-ton dehumidifier, where the good due from Inland Metals was not simply a 7/£-ton dehumidifier in and of itself but, according to their bargain, was a dehumidifier that would take care of the humidity and odor problems at the athletic club. To dismiss this fact is to negate the finding of a breach of express warranty in the first place.
Furthermore, the Court expresses a basic concern that a 10-ton dehumidifier would cost more than one that is 7$-tons, but allowing this fact to control merely excuses Inland Metals for submitting a low bid based on bad computations and estimates and does not reflect the true intent behind the principle— that if a buyer covers, he cannot purchase a good that is unreasonably beyond what he had contracted with the seller for and expect the seller to absorb the difference. In the present case, what the parties contracted for *243was a dehumidifier that would solve the Kel-lers’ humidity problems, and a 10-ton dehumidifier reasonably falls into that category of good.
Under the Court’s reasoning, had the Kel-lers accepted the nonconforming dehumidifier, they would have been able to pursue the damage remedy in I.C. § 28-2-714, which would have allowed them the difference in value. Under that statutory provision, when the buyer accepts nonconforming goods, the contract remedy is the difference “between the value of the goods accepted and the value they would have had if they had been as warranted, ” (emphasis added).9 Instead, because the Kellers were observant and prudent in the course of their business dealings and promptly rejected the nonconforming goods, they are denied that compensation here. It places a strange premium on acceptance if buyers can only get their warranties honored when they accept nonconforming goods. Rather than force buyers to accept nonconforming goods to protect their interests in enforcing a warranty, I.C. § 28-2-713 provides the same remedy when nonconforming goods are rejected and no acceptance made. In both eases, the buyer’s remedy is the difference in price between what the buyer would have received if there had been no breach, and what the buyer actually received from the breaching seller. What the buyer would have received was the good as warranted. Section 28-2-713 of the Idaho Code provides this remedy and protects the buyer’s expectation interest regardless of whether the buyer has rejected or accepted nonconforming goods.10
Finally, to award the Kellers a contract remedy for the breached warranty does not expand a seller’s liability for damages beyond our State’s statutory framework. To the contrary, such a remedy comports with the letter and spirit of our contract damages jurisprudence. See I.C. § 28-1-106 (“[Remedies ... shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed.”); I.C. § 28-2-711 emt. 3 (“[TJhis Act requires its remedies to be liberally administered.”); see also Jensen v. Seigel Mobile Homes Group, 105 Idaho 189, 194, 668 P.2d 65, 70 (1983) (“[T]he Uniform Commercial Code requires that revocation remedies be liberally administered to put the buyer in ‘as good a position as if the other party had fully performed____’ ”). Clearly, the buyer’s expectation interest is protected through the availability of benefit of the bargain remedies. The Kellers’ bargain included receiving a dehumidifier that would eliminate the odor and humidity problems in their athletic club. The fact that the size of the dehumidifier is listed in the contract should not deprive the Kellers of the warranted performance for which they bargained.
Because I believe the Court’s opinion does not provide the appropriate remedies to the Kellers for the breach of warranty caused by Inland Metals, I respectfully dissent.

. The Court recounts in detail in Part A of its opinion how the relieving of humidity and odor in the athletic club was the underlying purpose behind the contract, and that the Kellers did not accept Inland Metal’s bid until they were repeatedly assured the 7)4-ton dehumidifier would accomplish this task.

. I.C. § 28-2-313 clearly states: (a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise; (b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description. See also Comment 1 to the Official Text (" 'express’ warranties rest on ‘dickered’ aspects of the individual bargain, and go so clearly to the essence of that bargain ...”). This principle is so weighted that disclaimers and other language tending to null an express warranty are "repugnant to the basic dickered terms” and are found inoperative unless they can be reconciled to the basis of the bargain. Id.; See also I.C. § 28-2-316(1); Jen*242sen v. Seigel Mobile Homes Group, 105 Idaho 189, 196, 668 P.2d 65, 71-72 (1983).

. See I.C. § 28-1-106.

. Where, in response to Inland Metals’ appeal, this Court has analyzed the timeliness of the Kellers’ rejection in Part B of its opinion, it has implicitly endorsed the reason behind the Kel-lers' rejection under I.C. § 28-2-601, which allows rejection only when "the goods or the tender of delivery fail in any respect to conform to the contract....” In doing so, this Court has accepted that the 71/5-ton dehumidifier was a defective good in accordance with the contract, though it acknowledges that "[t]he dehumidifier itself was not defective."

.This point is well established in I.C. § 28-1-106: "Remedies to he liberally administered. (1) The remedies provided by this act shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed ...” (emphasis added).

. For a stark example of this principle of the UCC, see Chatlos v. National Cash Register Corp., 670 F.2d 1304 (3rd Cir.1982). In Chatios, the defendant was a computer sales company that held itself out to be an expert in computers, and after plaintiff expressed its particular computer needs defendant recommended and subsequently sold plaintiff a system that it warranted would fulfill those needs. After paying for the system and then realizing that it was inadequate in fulfilling its needs, plaintiff brought suit against defendant for breach of warranty. The court found that plaintiff was entitled to the difference in value between what it had paid for the computer it received ($46,000) and a computer that would have fulfilled its needs as warranted (over $200,000).

. Several cases from other jurisdictions clearly bear this out. In Borman’s, Inc., v. Olympic Mills, Inc., 1993 WL 190344 (S.D.N.Y.), under New York’s Uniform Commercial Code § 2-713 (which is identical to Idaho’s) where a buyer rejected nonconforming hand towels, the court awarded the difference between the contract price and the value of goods as they had been warranted, which difference was $89,656.86. In Watson v. Tom Growney Equip., Inc., 104 N.M. 371, 721 P.2d 1302 (1986), where a tractor dealership offered a low price in a contract to sell a backhoe to the plaintiff and then refused to deliver claiming the offered price was an error, the court awarded the plaintiff the difference between the contract price ($15,818.65) and the market value of the backhoe ($31,500) on the basis of New Mexico’s UCC § 2-713 (also identical to Idaho’s).