Carter Enterprises, LLC v. Scott Equipment Co.

91 So. 3d 1134, 2012 WL 1192128, 2012 La. App. LEXIS 485
CourtLouisiana Court of Appeal
DecidedApril 11, 2012
DocketNo. 46,862-CA
StatusPublished
Cited by4 cases

This text of 91 So. 3d 1134 (Carter Enterprises, LLC v. Scott Equipment Co.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carter Enterprises, LLC v. Scott Equipment Co., 91 So. 3d 1134, 2012 WL 1192128, 2012 La. App. LEXIS 485 (La. Ct. App. 2012).

Opinion

GASKINS, J.

[¡The defendant, Scott Equipment Company, LLC (“Scott”), appeals from a trial court decision granting the plaintiff, Carter Enterprises, LLC (“Carter”), rescission of the sale of a scrap handler purchased from the defendant together with an award of attorney fees and court costs. Scott was given a credit for the value of the use, and Carter was ordered to return the scrap handler to the defendant. Scott also appeals the trial court grant of a post-trial motion for summary judgment dismissing its claim against Carter for the cost of engine repairs on the scrap handler. For the following reasons, we affirm in part and reverse in part the trial court judgment and remand for further proceedings.

FACTS

Barry Carter, the owner of Carter, had been involved in the logging business for many years and had purchased equipment from Scott in the past. Mr. Carter went into the scrap metal business and formed a new company, Top Dollar Scrap & Recover, LLC (“Top Dollar”). He talked with Burton Schieffler, a salesman with Scott, about the need for a scrap handler machine. Mr. Schieffler told Mr. Carter about a Volvo excavator that Scott had purchased from Volvo in 2006 and had previously rented to another company for 15 months for use as an excavator. He informed Mr. Carter that the excavator could be converted to a scrap handler. Scott purchased a cab, boom, grapple, and magnet from other suppliers and installed them on the excavator, converting it into a scrap handler. This work took several months.

li>Mr. Carter purchased the machine from Scott for $273,457.87, plus tax.1 The machine was delivered to Mr. Carter’s scrap yard in Homer, Louisiana, on April 10, 2008. Problems developed with the scrap handler almost immediately. The machine felt unstable to operators and sometimes the tracks came off. The pins on the grapple frequently broke, the air conditioning in the cab did not work properly, the turn motor to the grapple blew seals and lost hydraulic fluid. There were electrical problems affecting the generator and magnet. The machine developed difficulties with the engine which eventually necessitated its replacement. Scott came out to the scrap yard on numerous occasions to fix the machine, but the problems persisted. According to Carter, the scrap handler is still not usable. Carter would have used the machine approximately 300 hours per month. However, during the first six months Carter had the machine, it was only usable for about seven hours per month. Eventually, Scott refused to continue servicing the machine.

On June 15, 2009, Carter filed suit against Scott and Volvo Construction Equipment North America, Inc., claiming that the scrap handler had redhibitory vices and demanding a return of the purchase price, attorney fees, and all other necessary and equitable relief. Carter al[1137]*1137leged that Scott and Volvo knew or should have known that the equipment was defective at the time of delivery and sale.2

IsScott filed a reconventional demand against Carter and a third-party demand against Top Dollar, asserting that Carter owed $56,340.37 for replacement of the engine in the machine. Scott also sought to recover on the promissory note given in connection with the purchase of the scrap handler.

Volvo filed a motion for summary judgment, claiming among other things that the plaintiff had no proof of any claim against Volvo for redhibition. Volvo asserted that any defects in the machine were caused by the intervening act of a third party. Scott also filed a motion for summary judgment, seeking to dismiss Carter’s claim for recovery on the engine, turbocharger, and track malfunctions as well as the claims regarding the configuration and specification of the component parts used in the conversion process. Scott argued that there was no showing that there were any defects in the engine, turbocharger, or tracks when the excavator was delivered to Scott from Volvo in 2006.

On September 9, 2010, the trial court held a hearing on various exceptions and motions filed by the parties. The trial court granted in part Volvo’s motion for summary judgment dismissing with prejudice all redhibition claims arising out of or relating to the conversion of the machine, reserving any rights that might exist against Volvo in warranty. The trial court bifurcated the issue of Scott’s reconven-tional and third-party demand and reserved to Carter and to Scott the right to bring a claim in warranty regarding the repair cost of $56,340.37 for the replacement of the engine in 2009. Volvo reserved any objections, defenses, and limitations to any claim |4for warranty. Scott’s motion for summary judgment seeking to dismiss Carter’s claim for recovery on the engine, turbocharger, and track malfunctions was denied.

Trial on the merits was held on October 12,13, and 14, 2010. On January 31, 2011, the trial court signed and filed a judgment in favor of Carter and against Scott, finding that the machine had redhibitory defects and ordering the rescission of the sale of the scrap handler. Scott was ordered to pay Carter $320,094.60, together with attorney fees, court costs, and interest and Carter was ordered to return the scrap handler to Scott. Scott was given a credit for the use of the machine by Carter in the amount of $17,366.

The trial court filed written reasons for judgment. The court found that the excavator originally purchased by Scott was converted by that company into a scrap handler. Scott ordered component parts from various manufacturers including a cab, boom, large counterweight, and a grapple magnet assembly. Scott installed the parts, converting the excavator into a scrap handler. The retrofitting took two months and the converted scrap handler was delivered to Mr. Carter’s scrap yard. Calvin Allen, a heavy equipment operator with Carter and the main operator of the scrap handler, began experiencing problems with the machine immediately. The pins in the grapple assembly broke, causing it to disconnect from the scrap handler. The turn motor in the-grapple was not [1138]*1138working properly and began leaking. The air conditioner in the- cab malfunctioned. Technicians from Scott were dispatched to address the problems with the scrap handler. Scott technicians | Stestified that Scott over-pressurized the hydraulic system during the conversion process.

The trial court found that within the first six months after delivery, Scott made 20 service calls to the plaintiffs scrap yard. Cost of repairs made during that time was $17,371.02. It does -not appear that Carter was actually billed for this amount. The repairs did not resolve the problems. The scrap handler was used for only 46 hours in the first six months after delivery to the plaintiff.

In its opinion, the trial court observed that in April 2009, approximately one year after the delivery of the machine, the engine lost pressure and started smoking. Mr. Carter bought a new turbocharger from Scott and had it installed on the machine. This did not alleviate the problem and the engine had to be replaced. The. engine was not replaced until May 29, 2009. The court noted that Mr. .Carter stopped using the scrap handler for a period of time and stopped paying the note on the machine, hoping that Volvo would take it back. When Volvo refused to take the machine back, the plaintiff brought the note current and put the machine back into use. It began consuming huge quantities of oil, using 55 gallons over a four-day period. Scott refused to make any more repairs on the machine and Mr. Carter began using it less.

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Bluebook (online)
91 So. 3d 1134, 2012 WL 1192128, 2012 La. App. LEXIS 485, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carter-enterprises-llc-v-scott-equipment-co-lactapp-2012.