Court Opinion

ID: 9676891
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:37:08.771143+00
Date Added: 2024-06-11T18:16:52.166464
License: Public Domain

KAROHL, Chief Judge,
dissenting.
The judgment entered on Count III which alleged a violation of Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 should be reversed because that statute has no application to the facts of the present case. The damage instruction submitted on Counts I and II misdirected the jury because the instructions were patterned after MAI 4.01 and should have been patterned after 4.02. Accordingly, I would reverse and remand for a new trial on Count I, breach of contract, and Count II, breach of warranty.
In the present case the parties structured a re-roofing agreement on the basis of a total sum for materials and labor. The contract provides: “Work to be done in a first class, workmanlike manner, for the sum of $8,272.00 net. To be paid upon completion of work.” Contractor agreed to provide the materials and labor for the installation of the roof for the single price. The contract for $8,272 encompassed the job of re-roofing without reference to a breakdown of component costs for material and labor. Homeowner purchased a roof, not roofing materials. Title to the roofing materials did not pass to homeowner until contractor installed the roof. The materials were an integral part of the home, affixed to land and, therefore, realty when they became the property of homeowner. Prior to their integration into the home, the roofing materials were the tangible personal property of the contractor. Homeowner did not purchase and never owned the roofing materials before they became realty.
Homeowner did not separately purchase any consumer products. Thus, there was no “time of sale” of consumer products. The distinction between purchase of a constructed home and repair or improvements of previously constructed real estate ignores the analysis published by the Federal Trade Commission in 16 CFR § 700.1(e) which directs an analysis based on “the nature of the purchase transaction.” This section provides:
The coverage of building materials which are not separate items of equipment is based on the nature of the purchase transaction. An analysis of the transaction will determine whether the goods are real or personal property. The numerous products which go into the construction of a consumer dwelling are all consumer products when sold “over the counter,” as by hardware and building supply retailers. This is also true where a consumer contracts for the purchase of such materials in connection with the improvement, repair, or modification of a home (for example, paneling, dropped ceilings, siding, roofing, storm windows, remodeling). However, where such products are at the time of sale integrated into the structure of a dwelling they are not consumer products as they cannot be practically distinguished from realty. Thus, for example, the beams, wallboard, wiring, plumbing, windows, roofing, and other structural components of a dwelling are not consumer products when they are sold as part of real estate covered by a written warranty. (Our emphasis). 16 CFR § 700.1(e).
Accordingly, a contract for purchase of consumer products may be agreed to where there are detailed specifications calling for a sale of consumer goods in conjunction with a further agreement for their use in construction. In the present case no such agreement was reached by the parties. Frederic Roofing Company agreed for a fixed price to acquire the materials needed and to install them. Plaintiff Muchisky had the benefit of both the manufacturer’s warranty and Frederic’s warranty. Under these circumstances and on these facts Magnuson-Moss has no application. Homeowner became the owner of roofing materials when installed and made a part of the real estate and not before.
*80The stated purpose of the statute suggests that it does not apply to these facts. The statute was enacted to provide minimum disclosure standards for written consumer product warranties; to define minimum federal content standards for such warranties; to amend the Federal Trade Commission Act in order to improve its consumer protection activities; and for other purposes not relevant here. Magnuson-Moss was intended to “supplement state warranty law by prescribing certain minimum standards for warrantors, and by affording consumers additional avenues for redress.” Walsh v. Ford Motor Co., 807 F.2d 1000, 1012 (D.C.Cir.1986).
In general, the Magnuson-Moss Act was designed to protect consumers from deceptive warranty practices. Kravitz v. Homeowner’s Warranty Corp., 542 F.Supp. 317, 320 (E.D.Pa.1982). Plaintiff received a verdict in both Missouri common law causes of action, contract and warranty. The existing state law fully protected the homeowner and there were no problems with warranties. See Clark v. Jim Walter Homes, Inc., 719 F.Supp. 1037, 1042 (S.D.Ala.1989). Real property is not covered by the Act. Id. at 1043.
It is the nature of the transaction not the nature of the real estate (new or repaired) which must be determined in order to apply or reject Magnuson-Moss. The analysis may apply to new homes or repaired homes. The decisive question is whether the agreement is to purchase goods and to purchase services in which event Magnu-son-Moss may apply; or, if the agreement is to purchase a completed project which includes goods and services then the homeowner received the consideration he is entitled to by the agreement when all items of tangible personal property were attached to real estate. Homeowner never owned or purchased consumer goods in this case.
As a matter of preserved error defendant correctly argues a MAI 4.02 damage instruction should have been given on the warranty and contract submissions, not 4.01 as submitted. MAI 4.01 (1980 revision) should be used when both property and consequential damages are sought, while MAI 4.02 (1980 revision) should be used where the only issue is property damage. MAI 4.02, Notes on Use No. 2; Crank v. Firestone Tire & Rubber Co., 692 S.W.2d 397, 402 (Mo.App.1985); Stegan v. H.W. Freeman Construction Co, Inc., 637 S.W.2d 794, 798 (Mo.App.1982). It is sufficient to observe in this dissent that the jury awarded damages which may have exceeded the full benefit of the bargain which may be recovered on either contract or warranty theories. The homeowner argued damages pertaining to both recision and breach of contract. No request was made for consequential damages and there was no offer of any evidence with respect thereto. The damage instruction was wrong on Counts I and II and the error was prejudicial. We should reverse the Magnuson-Moss judgment and remand the warranty and contract claims for a new trial.