Court Opinion

ID: 2832618
Source: CourtListenerOpinion
Date Created: 2015-09-01 12:08:18.998777+00
Date Added: 2024-06-11T12:24:38.217207
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance with
the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

               IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA14-1186

                                Filed: 1 September 2015

Halifax County, No. 08 CVS 1437

ASHLEY KEITH PITTMAN, and wife, DeANNA PITTMAN, Plaintiffs,

              v.

HENRY MONCURE MOTORS, INC., MOBILE HOME SALES, a Corporation, and
CRESTLINE HOMES, INC., a Corporation, Defendants.

       Appeal by defendants from judgment entered 30 June 2014 by Judge W.

Russell Duke, Jr. in Halifax County Superior Court. Heard in the Court of Appeals

18 March 2015.

       Jimmie R. “Sam” Barnes for plaintiffs-appellees.

       Chichester Law Office, by Geoffrey P. Davis, for defendants-appellants Henry
       Moncure Motors, Inc. and Mobile Home Sales.

       GEER, Judge.

       Defendants Henry Moncure Motors, Inc. (“Moncure Motors”) and Mobile Home

Sales appeal from a judgment entered against them for damages arising out of defects

in a manufactured home that Moncure Motors sold to plaintiffs.                 On appeal,

defendants primarily argue that the warranties set out in the Uniform Commercial

Code (“UCC”), the basis for the trial court’s award, do not apply to defendants’ sale of

the manufactured home to plaintiffs. We hold that the manufactured home that
                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

defendants Moncure Motors sold to plaintiffs here was a “good” covered by the UCC.

It is well established that the UCC allows a purchaser of goods to hold the seller liable

for breach of the implied warranty of merchantability. Because the undisputed

evidence and the trial court’s findings establish that the home’s defects breached the

implied warranty of merchantability, we affirm the trial court’s judgment and award

of damages against defendants.

                                         Facts

      Plaintiffs’ evidence tends to show the following facts. On 10 January 2003,

after talking with Philip Moncure, President and General Manager of defendant

Moncure Motors, plaintiffs Ashley Keith Pittman and DeAnna Pittman entered into

a contract with Moncure Motors for the sale, delivery, and setup of a manufactured

home for a total price of $92,135.00. That price included $15,000.00 in “optional

equipment,” $9,500.00 of which was for a brick foundation. Plaintiffs intended for

the home to be their primary residence.

      At Mr. Moncure’s request, Mr. Pittman contacted Jessie Thompson to build a

foundation for the home. Mr. Moncure contacted a crane crew in Petersburg, Virginia

and a contractor named Tommy Marlowe to perform the rest of the setup of the home.

Mr. Marlowe and his crew were tasked with “lift[ing] the walls and the roof and

put[ting] all that stuff together,” including “put[ting] braces on the rafters,” nailing

extra shingles, and attaching plywood to the roof.

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

      The home, which was manufactured by Crestline Homes, Inc. (“Crestline”), a

company that has apparently filed for bankruptcy, was delivered to plaintiffs’ lot in

two sections wrapped in a plastic wrap seal sometime in May 2003. In transit, wind

and rain ripped the plastic of one of the sections all the way down its side, causing

water to enter into it. After both sections were delivered to plaintiffs’ lot, more rain

fell and entered into the exposed section. Prior to the setup, Mr. Pittman and Mr.

Moncure together saw that one of the sections had suffered water damage from the

leakage.

      After the foundation was built by Mr. Thompson and the home was lifted onto

the foundation by crane, Mr. Marlowe’s crew erected the roof.           However, they

improperly installed the roof.

      Although Mr. Pittman told Mr. Moncure that “this is not what I paid for” and

to “take [the home] back,” Mr. Moncure assured Mr. Pittman that he would address

the problems with the home. Part of the home was gutted, cleaned of mold, and

rebuilt, and, in September 2003, plaintiffs moved into the home. After moving in,

plaintiffs experienced severe water leakage through their roof as well as a number of

other problems with the interior and exterior of the home.               Mr. Moncure

unsuccessfully attempted to address these problems over the next year and, in

September 2004, plaintiffs, through their attorney, demanded a replacement home

from Moncure Motors and Crestline.

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

      Following the September 2004 letter, the parties agreed that Crestline would

be given a further opportunity to cure the defects in the home, and Moncure Motors

would be financially responsible for the repairs covered by warranty. While over the

next two years, the roof, vinyl siding, and electrical circuit breakers were replaced,

many defects, including problems with the electrical system, persisted.

      Plaintiffs filed suit against Crestline and Moncure Motors at some point in

2006, but dismissed that action without prejudice. On 26 September 2008, plaintiffs

refiled their complaint against defendants and Crestline alleging that as a result of

Crestline’s manufacture and delivery and defendants’ setup of the home, the home

sustained extensive water damage and other serious problems with the roof, vinyl

siding, flooring, bathroom, interior walls, and electrical wiring.

      On 9 December 2008, Moncure Motors filed an answer to plaintiffs’ complaint.

On 12 December 2008, Crestline answered plaintiffs’ complaint denying the material

allegations, and on 29 December 2008, Crestline filed a cross-claim against Moncure

Motors asserting a claim for indemnification for work performed on plaintiffs’ home

allegedly on Moncure Motors’ behalf. On 7 January 2009, Moncure Motors amended

its answer to respond to Crestline’s cross-claim and, in turn, filed a cross-claim

against Crestline for indemnification or contribution for any liability Moncure Motors

might have on account of, among other reasons, any alleged breach of warranty of

Crestline.

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                  Opinion of the Court

      On 14 April 2014, following a pre-trial conference in which the parties entered

into several stipulations, the trial court held a bench trial. Plaintiffs presented the

testimony of Mr. Pittman, and defendants presented the testimony of Mr. Moncure.

The trial court found both witnesses “to be very credible” and noted that “the evidence

and/or testimony in these matters was basically the same[.]”

      On 30 June 2014, the trial court entered a judgment in plaintiffs’ favor that

included the following findings of fact. Defendant Moncure Motors is a dealer in the

business of selling new manufactured modular homes.           Plaintiffs and Moncure

Motors entered into a contract providing that plaintiffs would purchase from Moncure

Motors “a new modular home, a dwelling,” and Moncure Motors would place and

setup the home on plaintiffs’ lot. Plaintiffs further agreed to pay Moncure Motors a

total negotiated price of $92,135.00. The house sustained extensive water damage

prior to the setup, which caused substantial defects to the manufactured dwelling.

The subsequent setup was also not performed in a workmanlike manner, resulting in

further substantial defects in the manufactured dwelling.

      The combination of the water damage sustained prior to the setup and the

failure to set up the house in a workmanlike manner “caused the dwelling to fail to

meet the standard workmanlike quality then prevailing at the time and place of

construction in Halifax County, resulting in substantial defects in the manufactured

dwelling[.]” Plaintiffs’ expectations regarding the purchase of the dwelling were not

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                  Opinion of the Court

met, and “a reasonable person in the same or similar circumstances would consider

the breach a substantial deprivation of the material benefit of the purchase of the

dwelling[.]” The trial court further found that by their words and conduct, plaintiffs

elected to rescind the purchase of the dwelling. Plaintiffs gave Moncure Motors notice

of the breach and, subsequently, Moncure Motors attempted to correct or repair “the

water damage and the workmanlike setup of the dwelling in a reasonable and timely

manner, but failed to be successful in doing so.”

      Based on these findings, the trial court made the following conclusions of law:

                   1.     That a newly manufactured/modular home is
             defined in Article 9 of Chapter 143 and Chapter 87 of the
             North Carolina General Statutes.

                    2.   That the Uniform Commercial Code, Chapter
             25 of the North Carolina General Statutes sets forth the
             applicable     warranty     provisions     for      such
             manufactured/modular homes; and

                    3.     That the Defendant, Henry Moncure Motors,
             Inc. was in the business of selling manufactured/modular
             homes on the date in question and did sell unto the
             Plaintiffs a newly manufactured/modular home for the sum
             of $92,135.00; and

                    4.    That pursuant to the aforesaid sale the
             Defendant, Henry Moncure Motors, Inc. did express and/or
             imply to the Plaintiffs that the manufactured/modular
             home was constructed free from major structural defects
             and in a workmanlike manner so that it met the standard
             of workmanlike quality then prevailing at the time and
             place of construction and that it was fit for the particular
             purpose for which it was purchased; and

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                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

                   5.      That the Defendant, Henry Moncure Motors,
             Inc. did breach the expressed/implied warranty to the
             Plaintiff; and

                    6.   That the Plaintiffs justifiably rescinded the
             sale/purchase of the manufactured/modular home; and

                  7.     That the Plaintiffs are entitled to recover
             money damages from the Defendant, Henry Moncure
             Motors, Inc. for the breach of the expressed/implied
             warranty.

      The trial court then awarded to plaintiffs for breach of warranty $92,135.00,

plus interest at the legal rate from 1 September 2004, the date that the trial court

found plaintiffs “made it unequivocally clear that they had rescinded the contract[.]”

The trial court further specified that upon Moncure Motors’ payment of the damages,

Moncure Motors would be entitled to recover the manufactured home from plaintiffs’

property upon no less than six months’ notice, although Moncure Motors was required

“to make this election” within 18 months from the entry of judgment. Defendants

timely appealed to this Court.

                       Standard of Review and Applicable Law

      With respect to our review of defendants’ challenges to the trial court’s

judgment, “ ‘[i]t is well settled in this jurisdiction that when the trial court sits

without a jury, the standard of review on appeal is whether there was competent

evidence to support the trial court’s findings of fact and whether its conclusions of

law were proper in light of such facts. Findings of fact by the trial court in a non-jury

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                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

trial have the force and effect of a jury verdict and are conclusive on appeal if there

is evidence to support those findings.’ ” Majewski Enters., Inc. v. Park at Langston,

Inc., 211 N.C. App. 525, 530-31, 711 S.E.2d 454, 459 (2011) (quoting Shear v. Stevens

Bldg. Co., 107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992)). In making its findings,

“[t]he trial court is entitled to draw all reasonable inferences from the evidence.”

Estroff v. Chatterjee, 190 N.C. App. 61, 72, 660 S.E.2d 73, 80 (2008). Any findings not

challenged on appeal “are presumed to be supported by competent evidence and are

binding on appeal.” Montague v. Montague, ___ N.C. App. ___, ___, 767 S.E.2d 71, 74

(2014). “ ‘A trial court’s conclusions of law, however, are reviewable de novo.’ ”

Majewski Enters., 211 N.C. App. at 531, 711 S.E.2d at 459 (quoting Shear, 107 N.C.

App. at 160, 418 S.E.2d at 845).

      At the outset, we note that there is no dispute that plaintiffs’ home is subject

to the provisions of Article 9A of Chapter 143 of the General Statutes, as it comes

squarely within the definition of “[m]anufactured home” found in that chapter: “A

structure, transportable in one or more sections, which, in the traveling mode, is eight

feet or more in width or is 40 feet or more in length, or when erected on site, is 320 or

more square feet, and which is built on a permanent chassis and designed to be used

as a dwelling with or without a permanent foundation when connected to the required

utilities, and includes the plumbing, heating, air conditioning and electrical systems

contained therein.” N.C. Gen. Stat. § 143-143.9(6) (2013) (emphasis added).

                                          -8-
                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                  Opinion of the Court

      As the home was a manufactured home under Article 9A, it also falls within

the scope of the UCC. The provisions of North Carolina’s version of the UCC, in

Article 2 of Chapter 25 of the General Statutes, apply to contracts for the sale of

“goods,” N.C. Gen. Stat. § 25-2-102 (2013), which include “all things (including

specially manufactured goods) which are movable at the time of identification to the

contract for sale[,]” N.C. Gen. Stat. § 25-2-105(1) (2013). Because plaintiffs’ home is

a “[m]anufactured home” under Article 9A of the General Statutes, the home is also

a “good” described under the UCC. Cf. Singletary v. P & A Invs., Inc., 212 N.C. App.
469, 474, 712 S.E.2d 681, 685 (2011) (explaining manufactured homes are generally

treated as “goods” under UCC except when “annexed to land with the intent that it

be permanent” or other circumstances present at point of sale justifying treating

mobile home “as realty affixed to the land”).

                           Challenges to Findings of Fact

      Defendants first challenge the trial court’s Finding of Fact No. 2, which

provides that plaintiffs and Moncure Motors entered into a contract “that the

Plaintiffs would purchase from the Defendant, Henry Moncure Motors, Inc. a new

modular home, a dwelling to be placed and setup [sic] on the Plaintiff’s property by

the Defendant, Henry Moncure Motors, Inc.”          However, the parties’ stipulations

included that plaintiffs entered into a contract with Moncure Motors for Moncure

Motors to sell them the home at issue. That contract stated that Moncure Motors

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                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                    Opinion of the Court

“give[s] free delivery . . . for a distance as far as 50 miles from our lot.” At trial, Mr.

Moncure testified that he arranged for the delivery of plaintiffs’ home directly from

Crestline to plaintiffs’ lot because that arrangement was more convenient for

Moncure Motors.      This evidence supports the finding that the contract was for

Moncure Motors to place the modular home on plaintiffs’ lot. See also N.C. Gen. Stat.

§ 25-2-509(1)(b) (2013) (providing that seller contractually retains risk of loss until

delivery at the designated location if contract provides goods are to be transported by

carrier and delivered at particular location).

      Additionally, Moncure Motors took out a “NORTH CAROLINA MODULAR

BUILDING SET-UP CONTRACTOR LICENSE BOND,” as is required for a “set-up

contractor” under N.C. Gen. Stat. § 143-143.12 (2013), and Mr. Moncure testified that

the set-up contractor is “responsible for lifting the home off the frame and putting it

on the foundation and raising the roof and completely drying it in.” The evidence also

showed that Moncure Motors procured, or required plaintiffs to contact, particular

subcontractors to set up plaintiffs’ manufactured home, and that Mr. Moncure was

responsible for paying these contractors from the money plaintiffs paid to Moncure

Motors. This evidence supports the finding that plaintiffs contracted with Moncure

Motors to set up the home on plaintiffs’ lot. Finding of Fact No. 2 is, therefore,

supported by the evidence and is binding on appeal.

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                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

      Defendants also challenge Finding of Fact No. 4, which provides that “before

[it] was setup [sic] by the Defendant, Henry Moncure Motors, Inc.,” plaintiffs’ home

sustained “extensive water damage, which caused substantial defects to the

manufactured dwelling[.]”     Article 9A of Chapter 143 defines “[s]etup” as “[t]he

operations performed at the occupancy site which render a manufactured home fit for

habitation.” N.C. Gen. Stat. § 143-143.9(12). We have already concluded that the

record contains evidence supporting the finding that Moncure Motors was responsible

for the setup of plaintiffs’ manufactured home, and we also conclude that the record

evidence supports the finding that the home sustained extensive damage in the

course of delivery to plaintiffs and prior to setup.

      Article 9A also defines “[s]ubstantial defect” as “[a]ny substantial deficiency in

or damage to materials or workmanship occurring in a manufactured home which

has been reasonably maintained and cared for in normal use[,]” and it also means

“any structural element, utility system or component part of the manufactured home

which fails to comply with the [Building] Code.” N.C. Gen. Stat. § 143-143.9(14). At

trial, Mr. Moncure acknowledged that the home suffered “extensive” water damage

prior to setup. After being delivered, the sections sat on plaintiffs’ lot for several

weeks waiting for Mr. Thompson to complete the foundation. The evidence showed

that, during this time, water was able to pool up on the inside and on the unraised

roof of the exposed section. When the plastic was removed from that section, the

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

interior “looked like a rainbow” due to considerable mold growth. Additionally, the

vinyl siding looked like “[a] roller coaster.” This evidence supports a reasonable

inference by the trial court that the water damage prior to the setup caused

“substantial deficiency in or damage to materials or workmanship.” Id. Finding of

Fact No. 4 is, therefore, supported by evidence presented at trial.

      Defendants also challenge Finding of Fact Nos. 5 and 6, which state that the

setup was not performed in a workmanlike manner, led to water damage to the

dwelling, and “caused substantial defects in the manufactured dwelling[.]” Finding

of Fact No. 6 also provides that water damage to the home “caused the dwelling to

fail to meet the standard of workmanlike quality” and resulted in “substantial defects

in the manufactured dwelling[.]”

      The evidence at trial indicated that after the home was finally placed on its

foundation, Mr. Pittman observed Mr. Marlowe’s work crew as it performed the setup.

Mr. Pittman testified: “I have never seen people work that fast in my life doing sloppy

work[,]” and he noticed that “they were in one hundred hurries.” When the setup

crew was finished, “[y]ou could pick the roof up off the two-by-sixes.” After plaintiffs

and their children moved in, they noticed that the roof leaked extensively, water

“poured into the house,” water was absorbed into the walls, water came out of the

wall sockets, nails began backing out of the flooring, the children’s bathtub cracked,

the floors sank, the home wobbled when people walked through it, the walls and

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                  Opinion of the Court

ceilings cracked, the countertops warped, doors would not shut, and the electrical box

made a “sizzling” sound and burning smell that was attributed to short-circuiting.

      This evidence supports the finding that the setup was not performed “in a good

and workmanlike manner.” See Domingue v. Nehemiah II, Inc., 208 N.C. App. 429,

431, 435, 703 S.E.2d 462, 463-64, 466 (2010) (reversing dismissal for failure to state

negligent construction claim alleging breach of workmanlike quality standard for

defects including damaged roof, improperly installed flashings causing water to

intrude into building, failure to waterproof doorjambs and install doors causing water

intrusion, fungal growth, subfloor damage, defective floor joists resulting in sagging

floors, and cracked walls and tiles). This evidence also supports a finding that the

improper setup caused substantial defects to the home. See Osburn v. Bendix Home

Sys., Inc., 613 P.2d 445, 447, 449 n.9 (Okla. 1980) (upholding trial court’s

determination of breach of warranty that mobile home would be “ ‘free from any

substantial defects in material or workmanship’ ” in light of evidence that

“substantial water leakage made itself manifest during a rainstorm” causing “heavy

water damage” to interior).

      Defendants also challenge Findings of Fact Nos. 7 and 10. Finding of Fact No.

7 provides that plaintiffs “elected to rescind” the purchase of the home. Finding of

Fact No. 10 provides in pertinent part that plaintiffs “gave and the Defendant, Henry

Moncure Motors, Inc. had notice of the breach and thereafterwards the Defendant,

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                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

Henry Moncure Motors, Inc. attempted to repair or correct the water damage and the

workmanlike [sic] setup of the dwelling in a reasonable and timely manner, but failed

to be successful in doing so.”

      The determinations whether plaintiffs rescinded their contract and whether

Moncure Motors breached the contract depend on what warranties and remedies

protected plaintiffs. Because defendants dispute plaintiffs’ rights and remedies,

these determinations are more appropriately discussed below along with the

conclusions of law. To the extent that Finding of Fact No. 10 specifies that Moncure

Motors had notice of the defects and attempted to repair them, but failed to

adequately do so, ample evidence supports that portion of the finding.

      Mr. Moncure admitted at trial that he had extensive conversations with Mr.

Pittman about the problems with plaintiffs’ home. Further, Mr. Pittman testified

that despite allowing Moncure Motors and Crestline about three years after plaintiffs

moved into the home in order to repair the defects,

             you sleep at night wondering whether or not you are going
             to get burned up [because of the faulty electrical system].
             My children -- one child sleeps in the floor at the foot of the
             bed, and one child sleeps on the couch, because they are
             scared to get away from us. The bathroom still has the
             mold in there. I can’t get it out of it. . . . My floors are
             sagging. My walls are cracking. My windows [are] messed
             up. My roof is unlevel. Upstairs will cost me double or
             triple to fix it.

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                  Opinion of the Court

With respect to the mold in the bathroom, Mr. Pittman explained that whenever he

runs the bathtub in the children’s bathroom, black mold starts to appear at the top of

the door, and that while he has tried to paint over it and increase the ventilation in

the bathroom, the mold problem persists. The portion of Finding of Fact No. 10 that

Moncure Motors had notice of the home’s problems, but failed to repair them, is

supported by evidence.

                         The Trial Court’s Conclusions of Law

      Defendants first contend that plaintiffs’ manufactured home is not, as the trial

court concluded, defined in “Article 9 of Chapter 143 and Chapter 87 of the North

Carolina General Statutes.” The conclusion that plaintiffs’ home is described by

Article 9 of Chapter 143 of the General Statutes appears to be a scrivener’s error, as

no provision in Article 9 provides any definitions of dwellings, no reference was made

to Article 9 at the hearing, and, moreover, plaintiffs’ home squarely falls within the

definition of “manufactured home” in Article 9A of Chapter 143. The trial court’s

reference to Chapter 87, which governs the Homeowners Recovery Fund which is not

at issue here, is immaterial.

      Defendants next challenge the trial court’s conclusion that the UCC “sets forth

the applicable warranty provisions for such manufactured/modular homes[.]” The

UCC provides for the creation of express warranties, N.C. Gen. Stat. § 25-2-313

(2013), an implied warranty of merchantability, N.C. Gen. Stat. § 25-2-314 (2013),

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                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                    Opinion of the Court

and an implied warranty of fitness for a particular purpose, N.C. Gen. Stat. § 25-2-

315 (2013). Defendants contend that the UCC warranties do not apply since Article

9A provides for warranties relating to the manufacture, sale, delivery, and setup of a

manufactured home.

       Defendants essentially argue that Article 9A provides the exclusive rights and

remedies for a purchaser of a manufactured home. While N.C. Gen. Stat. § 143-

143.16 (2013) does provide various warranties for purchasers of manufactured homes

that apply to dealers, set-up contractors, manufacturers, and suppliers (terms defined

in N.C. Gen. Stat. § 143-143.9), N.C. Gen. Stat. § 143-143.23 (2013) -- entitled “Other

remedies not excluded” -- also provides that “[n]othing in this Part . . . shall limit any

right or remedy available to the buyer or any power or duty of the Attorney General.”

(Emphasis added.) Thus, under the plain language of the statute, Article 9A does not

preclude plaintiffs’ remedies under the UCC. Because manufactured homes, like

mobile homes, can be “goods” under the UCC, the legislature intended, under N.C.

Gen. Stat. § 143-143.23, to make the UCC’s rights and remedies available to

purchasers of manufactured homes.

       In further arguing that Article 9A of Chapter 143 excludes buyers of

manufactured homes from the rights and remedies available under the UCC,

defendants point to N.C. Gen. Stat. § 143-143.17(a) (2013), which provides that

“claim[s] for warranty service or about a substantial defect . . . made to a licensee . . .

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

shall be handled as provided in this Part” by submitting such claims to the North

Carolina Manufactured Housing Board for resolution. While this provision provides

an extra-judicial mechanism for handling warranty or defect claims, nothing within

it limits the rights of buyers of manufactured homes to those rights set out in Article

9A. We conclude that Article 9A does not limit the warranties available to a buyer of

a manufactured home to those specifically set forth in that Article.

      Defendants next contend that because, as the trial court found, the contract at

issue was for the manufacture, sale, delivery, and setup of the manufactured home,

the contract encompassed both goods and services, and therefore Article 2 of the UCC

does not apply. While Article 2 of the UCC “does not apply to contracts for the

provision of services[,]” this Court has adopted the “predominant factor” test to

determine whether a mixed contract, which includes the provision of both goods and

services, like the one at issue here, should be considered a contract for goods. Hensley

v. Ray’s Motor Co. of Forest City, Inc., 158 N.C. App. 261, 265, 580 S.E.2d 721, 724

(2003). “Factors which have been used in determining whether a mixed contract

should be governed by the UCC include the following: ‘(1) the language of the contract,

(2) the nature of the business of the supplier, and (3) the intrinsic worth of the

materials.’ ” Id. at 266, 580 S.E.2d at 724-25 (quoting Princess Cruises, Inc. v. Gen.

Elec. Co., 143 F.3d 828, 833 (4th Cir. 1998)).

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                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                  Opinion of the Court

       Here, the language of the contract deals primarily with the terms of sale,

including the listed base price of the home as $76,500.00 and itemized “optional

equipment” in the amount of $15,000.00.           The “optional equipment” included a

heating oil rack, termite protection, electric system installation, plumbing, and a

brick foundation. The record indicates that Moncure Motors is in the business of

selling, distributing, and setting up mobile and manufactured homes, but that,

predominantly, Moncure Motors’ business is the sale and distribution of mobile

homes. Further, only a relatively small portion of the contract was itemized as not

goods -- i.e., termite protection, electric system installation, plumbing, and brick

foundation.

       Given the terms of the contract, it is apparent that the sale of the

manufactured home predominated and, consequently, Article 2 of the UCC is

applicable. See id. at 266, 580 S.E.2d at 725 (“[W]e note the language of the contract

deals primarily with the terms of sale, including the price, warranties, description

and model of the mobile home, and options and accessories.             The nature of

[defendant’s] business is the sale and distribution of mobile homes. Finally, the

intrinsic worth of the mobile home is approximately its fair market value or the

purchase price. Accordingly, we hold the contract is predominantly a contract for the

sale of goods[.]”).

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

      Defendants, however, liken Moncure Motors’ role to that of the defendant in

Jones v. Clark, 36 N.C. App. 327, 329, 244 S.E.2d 183, 184 (1978), who, as an inspector

of modular homes for a manufacturer, improperly certified that the modular home as

manufactured in that case was fit for habitation. In Jones, this Court held that the

defendant-inspector was not liable for the manufacturer’s breach of warranty under

the UCC because the inspector only provided services for the plaintiff-buyer, and

there was no privity of contract between the inspector and the buyer. Id. at 330, 244

S.E.2d at 185. The UCC, however, provides direct liability against a seller of goods

for a breach of warranty in the sale of goods. See N.C. Gen. Stat. § 25-2-711(1) (2013);

Wright v. T & B Auto Sales, Inc., 72 N.C. App. 449, 454, 325 S.E.2d 493, 496 (1985)

(holding purchaser of car entitled to sue dealer for breach of implied warranty of

merchantability).   Even though Moncure Motors contracted for the provision of

services, those services were provided pursuant to a contract for the sale of a

manufactured home by Moncure Motors to plaintiffs. Therefore, Jones is inapposite.

      Defendants next challenge the conclusion that Moncure Motors “did express

and/or imply to the Plaintiffs that the manufactured/modular home was constructed

free from major structural defects and in a workmanlike manner so that it met the

standard of workmanlike quality then prevailing at the time and place of construction

and that it was fit for the particular purpose for which it was purchased[.]” We agree

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

that there are no findings to support the conclusion that Moncure Motors expressly

warranted plaintiffs’ home.

      With respect to the UCC’s implied warranty of merchantability, defendants

assume that because “[i]n its conclusions of law, the trial court does not reference the

implied warranty of merchantability,” the trial court must have concluded that

Moncure Motors did not breach any implied warranty of merchantability.

Defendants point out that the language the trial court uses to describe the warranty

that Moncure Motors “did express and/or imply” to plaintiffs is not specifically found

in the UCC but is strikingly similar to the language the Supreme Court used in

articulating the implied warranty in Hartley v. Ballou, 286 N.C. 51, 62, 209 S.E.2d
776, 783 (1974). The trial court’s order, however, makes clear that it is applying the

warranties found in the UCC: “[T]he Uniform Commercial Code, Chapter 25 of the

North Carolina General Statutes sets forth the applicable warranty provisions for

such manufactured/modular homes[.]”

      The UCC’s warranty of implied merchantability guarantees, among other

things, that goods “are fit for the ordinary purposes for which such goods are used[.]”

N.C. Gen. Stat. § 25-2-314(2)(c). Implicit to a home’s fitness for use as a dwelling is

that it be free of major defects. See Vintage Homes, Inc. v. Coldiron, 585 S.W.2d 886,

888 (Tex. App. 1979) (considering evidence of “fifteen separate defects . . . [which]

were certainly of a serious nature” in support of breach of warranty for mobile home’s

                                          - 20 -
                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

fitness of use as dwelling). The findings and conclusions set out in the trial court’s

order support the conclusion that Moncure Motors implied a warranty of

merchantability to plaintiffs that their home was fit for its ordinary use as a dwelling.

      Defendants next challenge the conclusion that Moncure Motors “did breach the

expressed/implied warranty made to the Plaintiff[s].” The evidence presented at trial

overwhelmingly supports a conclusion that the home was not fit for use as a dwelling

unit. Nevertheless, the question before this Court is whether the trial court’s findings

of fact support the conclusion that the implied warranty of merchantability was

breached. We hold that the trial court’s findings minimally support the conclusion

that Moncure Motors breached the implied warranty of merchantability because the

home was not fit for use as a dwelling. See id. at 887-88 (holding jury verdict of breach

of warranty of fitness for ordinary use of mobile home as dwelling supported by

evidence of more than one dozen electrical, plumbing, and aesthetic defects, as well

as a buckled roof, most of which “permit[ed] the elements to enter into the trailer”).

      We next address the trial court’s determination that plaintiffs “elected to

rescind” the purchase of the manufactured home by their “words and conduct.”

Although “rescission” is not a remedy available under the UCC, N.C. Gen. Stat. § 25-

2-608 (2013) provides for the similar remedy of revocation of acceptance.          After

accepting goods from a seller,

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                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

                   (1)    The buyer may revoke his acceptance of a lot
             or commercial unit whose nonconformity substantially
             impairs its value to him if he has accepted it

                           (a)   on the reasonable assumption that its
                                 nonconformity would be cured and it
                                 has not been seasonably cured; or

                           (b)   without        discovery      of     such
                                 nonconformity if his acceptance was
                                 reasonably induced either by the
                                 difficulty of discovery before acceptance
                                 or by the seller’s assurances.

Id. “A buyer who so revokes has the same rights and duties with regard to the goods

involved as if he had rejected them.” N.C. Gen. Stat. § 25-2-608(3). “Formal notice

that acceptance is being revoked is not necessary; any conduct by the buyer

manifesting to the seller that he is seriously dissatisfied with the goods and expects

redress or satisfaction is sufficient.” Warren v. Guttanit, Inc., 69 N.C. App. 103, 109,

317 S.E.2d 5, 10 (1984).

      Although the trial court referred to the remedy of “rescission,” in UCC cases,

our appellate courts have concluded that references to the remedy of rescission should

be treated as revocations of acceptance. See Riley v. Ken Wilson Ford, Inc., 109 N.C.

App. 163, 173, 426 S.E.2d 717, 724 (1993) (“Rescission of a contract is not addressed

in the [UCC], but it has been treated as revocation of acceptance in the context of a

sale of goods.”). Accordingly, we must determine whether the trial court’s findings

are sufficient to support the conclusion that plaintiffs revoked their acceptance.

                                          - 22 -
                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

      After making findings regarding the substantial defects in the manufactured

home, the trial court determined that plaintiffs by “words and conduct . . . elected to

rescind the purchase of the dwelling[.]” The court found that “a reasonable person in

the same or similar circumstances would consider the breach a substantial

deprivation of the material benefit of the purchase of the dwelling[.]” After plaintiffs

gave Moncure Motors notice of the breach, Moncure Motors “attempted to repair or

correct the water damage and the workmanlike [sic] setup of the dwelling in a

reasonable and timely manner, but failed to be successful in doing so.” Based on

these findings, the trial court concluded that plaintiffs “justifiably rescinded the

sale/purchase of the manufactured/modular home[.]”          We hold that the record

contains ample evidence to support the findings regarding the defects, notice of those

defects to Moncure Motors, plaintiffs’ attempts to reject acceptance of the

manufactured home by demanding replacement of the home, and Moncure Motors’

inability to repair and correct the defects. The evidence is sufficient to support a

determination that plaintiffs initially revoked acceptance of the purchase of their

home. See Davis v. Colonial Mobile Homes, 28 N.C. App. 13, 17-18, 220 S.E.2d 802,

804-05 (1975) (holding letter demanding replacement or refund of purchase price of

mobile home, along with buyer’s numerous complaints of defects to dealer of mobile

home, gave notice of revocation of acceptance to dealer).

                                          - 23 -
                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

      Nonetheless, defendants contend that plaintiffs’ uninterrupted residence in

the home, for at least 11 years, should ultimately be read as plaintiffs’ acceptance of

the home and its nonconformities. While, under the UCC, any exercise of ownership

after giving notice of revocation of acceptance generally constitutes acceptance, see

N.C. Gen. Stat. § 25-2-606(1)(c) (2013), the “answer to the question of whether

[continued] use [of defective goods] equals acceptance [after giving notice of

revocation of acceptance] under the UCC. . . depends upon whether the use was

reasonable.” Toshiba Mach. Co., Am. v. SPM Flow Control, Inc., 180 S.W.3d 761, 772

(Tex. App. 2005) (internal quotation marks omitted).

      The reasonableness of continued use of defective goods after revocation may

depend on whether “(1) the seller tendered instructions concerning return of the

rejected goods upon notice of the revocation; (2) business needs or personal

circumstances compelled the buyer’s continued use; (3) the seller continued to offer

assurances that the nonconformities would be cured or that the buyer would be

recompensed for dissatisfaction and inconvenience during the period of continued

use; (4) the seller acted in good faith; and (5) the seller suffered undue prejudice as a

result of the continued use.” Wilk Paving, Inc. v. Southworth-Milton, Inc., 162 Vt.
552, 557, 649 A.2d 778, 782 (1994). While “[w]hat constitutes reasonable use is a

question of fact to be decided under the circumstances of each case, . . . courts

generally hold that using goods during the time when the seller is promising or trying

                                          - 24 -
                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                    Opinion of the Court

unsuccessfully to cure the nonconformity will not adversely affect the buyer’s rights.”

Toshiba Mach. Co., 180 S.W.3d at 772-73.

      Here, pursuant to Crestline’s promise to make further repairs following the

September 2004 letter, numerous attempts were made to address continued defects

in the home, including, among other things, replacing the roof, vinyl siding, and

electrical circuit breakers. Yet, despite these attempted repairs, the record and

transcript are replete with references to problems that had not been repaired at the

time of trial.   Further, Mr. Pittman testified that he has been continuously

dissatisfied with the home: “[I]t is steady stuff wrong. It has never been right. . . .

And I feel like when I paid that money -- I can understand a few things being wrong,

but I think it went overboard.” Mr. Pittman testified that he would have returned

the home to Moncure Motors, but Moncure Motors would not allow that. He also

testified that he and his family would have walked away from the home if they were

not indebted on it and the home were not on their family’s land. Nothing in the record

suggests that plaintiffs ever indicated to defendants that they were ever even

remotely satisfied with the home.

      Contrary to defendants’ contention that plaintiffs ultimately accepted the

egregiously defective home, the evidence shows that if plaintiffs at all waived

revocation of acceptance after giving notice via the September 2004 letter, such a

waiver was made on the condition that the repairs would be made to plaintiffs’

                                           - 25 -
                     PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

satisfaction. The evidence was uncontradicted that plaintiffs would have walked

away from the home but for the facts that Moncure Motors refused tender of their

home; the home was placed on plaintiffs’ family land; plaintiffs were indebted on it;

after giving notice of revocation of acceptance, plaintiffs agreed to allow Moncure

Motors and Crestline more time to attempt repairs; and the subsequent numerous

attempts to address the defects in the home were unsuccessful.          Based on that

evidence, the conditions necessary for plaintiffs to waive their revocation of

acceptance failed to materialize.     We also note that there is no evidence that

defendants were prejudiced by the continued use: Mr. Moncure testified that it cost

less to attempt repairs than to replace the home, and Moncure Motors acquiesced in

Crestline’s decision to attempt further repairs.

      Additionally, plaintiffs’ continued residence in the home since the filing of the

initial lawsuit in 2006 should not, as a matter of law, be counted against them in

determining whether they accepted the defective home. See Mobile Home Sales

Mgmt., Inc. v. Brown, 115 Ariz. 11, 16-17, 562 P.2d 1378, 1383-84 (Az. App. 1977)

(“[T]he staying in the mobile home pending the law suit cannot be, as a matter of law

in this case, considered a waiver of the buyers’ right to revoke the prior acceptance of

the home.”).    Consequently, plaintiffs’ continued residence in the home was

reasonable. We hold that the trial court did not err in determining that plaintiffs

revoked their acceptance of the home. See Schumaker v. Ivers, 90 S.D. 75, 85, 238

                                          - 26 -
                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                    Opinion of the Court

N.W.2d 284, 289 (1976) (“[W]e conclude that the trial court did not err in holding that

plaintiffs had . . . revoked their acceptance. . . . If [the] revocation of acceptance [of a

first organ] was in any way waived by plaintiffs’ accepting delivery of [a] second

organ, such [acceptance] was clearly based upon the condition that the replacement

organ would operate satisfactorily, a condition that failed to materialize.”).

       Defendants attempt to distinguish this case from Performance Motors, Inc. v.

Allen, 280 N.C. 385, 397, 186 S.E.2d 161, 168 (1972), in which our Supreme Court

explained, based on the evidence in that case, “[c]onstant complaints from September

to December with cessation of payment would seem to constitute sufficient notice of

revocation of acceptance.”     Defendants suggest that the evidence in this case is

insufficient to support revocation of acceptance because, unlike in Performance

Motors, plaintiffs here continued making payments on the home. However, nothing

in Performance Motors indicates that there can be no revocation of acceptance simply

when a buyer continues to possess and make payments on a defective good regardless

of other circumstances.

       Given the circumstances of this case, including the fact that the home was

plaintiffs’ primary residence on which they were indebted, defendants’ distinction

between this case and Performance Motors based on the fact that, here, plaintiffs

continued to make payments on the home, is untenable. See Breaux v. Winnebago

Indus., Inc., 282 So. 2d 763, 769 (La. Ct. App. 1973) (holding continued mortgage

                                           - 27 -
                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

payments on motor home did not waive right to rescind sale where dealer refused

tender, plaintiff had mortgage on motor home, and plaintiff was “left no recourse but

to forego his action or try to purchase a second vehicle while paying for the first,”

which “the average buyer is unable to afford”).

      Defendants do not directly challenge the conclusion that the revocation of

acceptance was justifiable as is required to revoke acceptance under N.C. Gen. Stat.

§ 25-2-608, but “assum[e], arguendo” that the defects substantially impaired the

value of the home.      Determining whether a good has a nonconformity which

substantially impairs its value to the buyer “requires the application of a two-part

test which considers both the buyer’s subjective reaction to the alleged defect . . . and

the objective reasonableness of this reaction . . . .” Allen v. Rouse Toyota Jeep, Inc.,

100 N.C. App. 737, 740, 398 S.E.2d 64, 65 (1990); see N.C. Gen. Stat. § 25-2-608(1).

“Such defects as were actually cured . . . cannot be utilized in the determination of

whether value was substantially impaired by the defects.” Jensen v. Seigel Mobile

Homes Grp., 105 Idaho 189, 194, 668 P.2d 65, 70 (1983). We hold that the trial court’s

findings addressing the significant defects of the home, findings regarding both

plaintiffs’ subjective reaction to the defects and how a reasonable person would react

to the defects, and findings that defendants were unable to repair the significant

defects are sufficient to support a determination that the value of the home was

substantially impaired by the defects.       Consequently, the trial court’s findings

                                          - 28 -
                      PITTMAN V. HENRY MONCURE MOTORS, INC.

                                   Opinion of the Court

support the conclusion that plaintiffs’ revocation of acceptance was justifiable. See

Henery v. Robinson, 67 Wash. App. 277, 288, 834 P.2d 1091, 1097 (1992) (holding

uncured defects of sagging floor and gap in front door substantially impaired value of

mobile home), abrogated on other grounds by Klem v. Wash. Mut. Bank, 176 Wash.
2d 771, 295 P.3d 1179 (2013) (en banc).

      Although defendants further contend that “it is relevant that . . . Plaintiffs

never alleged rescission in their Complaint” they cite no authority in support of this

proposition. We, therefore, do not address this argument. See N.C.R. App. P. 28(a).

      Defendants finally challenge the amount of damages awarded, contending that

“[i]nstead of returning the full purchase price to Plaintiffs, the trial court should have

based the amount of damages on some metric calculated to reasonably compensate

the Plaintiffs for the consequences they suffered as a result of the Appellants’ breach,

while taking into account their continued use of the residence.” While defendants

cite Hartley for this proposition, Hartley does not apply the remedies available under

the UCC, which are applicable here. N.C. Gen. Stat. § 25-2-711(1) provides that if a

buyer “rightfully rejects or justifiably revokes acceptance then . . . the buyer may . . .

recover[] so much of the price as has been paid[.]” Because the amount of damages

reflect the total price paid as provided in the findings, we hold that this conclusion is

supported by the findings.

      AFFIRMED.

                                          - 29 -
              PITTMAN V. HENRY MONCURE MOTORS, INC.

                         Opinion of the Court

Judges ELMORE and INMAN concur.

Report per Rule 30(e).

                                - 30 -