Ellis v. Precision Engine Rebuilders, Inc.

68 S.W.3d 894, 47 U.C.C. Rep. Serv. 2d (West) 992, 2002 Tex. App. LEXIS 1180, 2002 WL 221492
CourtCourt of Appeals of Texas
DecidedFebruary 14, 2002
Docket01-00-00787-CV
StatusPublished
Cited by147 cases

This text of 68 S.W.3d 894 (Ellis v. Precision Engine Rebuilders, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Ellis v. Precision Engine Rebuilders, Inc., 68 S.W.3d 894, 47 U.C.C. Rep. Serv. 2d (West) 992, 2002 Tex. App. LEXIS 1180, 2002 WL 221492 (Tex. Ct. App. 2002).

Opinions

OPINION

ADELE HEDGES, Justice.

Appellant, Joseph M. Ellis, sued appel-lee, Precision Engine Rebuilders, Inc. (Precision), for breach of contract, violations of the Deceptive Trade Practices Act (DTPA), and breach of implied warranty. The trial court rendered summary judgment for Precision. We affirm.

Background

On October 20, 1997, Ellis bought a rebuilt engine for his Ford Pinto from Precision for $640.40. After installation, the engine did not work properly. Ellis returned the engine to Precision for a second repair on November 14, 1998. Again, the engine did not work properly. After a [896]*896third repair, Precision discovered the problem and replaced the engine head.

Ellis sued Precision for breach of contract, DTPA violations, and breach of implied warranty. Precision moved for summary judgment, arguing as follows:

(1) The DTPA claim should fail as a matter of law for two reasons:
(a) it is actually a breach of contract action; and
(b) it is barred by limitations.
(2) The contract claim should fail as a matter of law because Precision performed under the contract.
(3) The breach of implied warranty claim should fail as a matter of law because Ellis expressly waived all implied warranties.

Without specifying the grounds for its ruling, the trial court granted the motion and rendered summary judgment for Precision. There is no indication in the record that Ellis objected to the trial court’s failure to specify the grounds on which it rendered summary judgment.

In three points of error, Ellis contends that the trial court erred in rendering summary judgment because: (1) Precision failed to perform on the contract claim; (2) the contract claim is not barred by limitations; and (3) the DTPA claim is not barred by limitations.1

Summary Judgment Standard of Review

To prevail on a motion for summary judgment, a defendant must establish that no material fact issue exists and that it is entitled to judgment as a matter of law. See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex.1999). If a defendant moves for summary judgment on the basis of an affirmative defense, it has the burden to prove conclusively all the elements of the affirmative defense as a matter of law. See KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). In conducting our review of the summary judgment, we take as true all evidence favorable to the nonmovant, and we make all reasonable inferences in the nonmovant’s favor. See id.

Breach of Contract: Failure to Perform

In his first point of error, Ellis contends that the trial court erred in rendering summary judgment because Precision failed to perform on the contract claim.

In Southwestern Bell Telephone Co. v. FDP Corp., 811 S.W.2d 572, 576 (Tex.1991), the Texas Supreme Court recognized the distinction between breach of contract and breach of warranty claims:

The UCC recognizes that breach of contract and breach of warranty are not the same cause of action. The remedies for breach of contract are set forth in section 2.711, and are available to a buyer “[w]here the seller fails to make delivery.” Tex. Bus. & Com.Code § 2.711(a). The remedies for breach of warranty, however, are set forth in section 2.714, and are available to a buyer who has finally accepted goods, but discovers that the goods are defective in some manner. Tex. Bus. & Com.Code §§ 2.714, 2 .711 (Comment 1).

Accordingly, breach of contract remedies are available to a buyer when the seller fails to make any delivery. S.W. Bell, 811 S.W.2d at 576. In contrast, [897]*897breach of warranty remedies are available to a buyer who has received and accepted goods, but discovers they are defective in some manner. Id. In other words, when a party fails to deliver the goods as promised, a breach of contract occurs. See Chilton Ins. Co. v. Pate & Pate Enter., Inc., 930 S.W.2d 877, 890 (Tex.App.-San Antonio 1996, writ denied). Conversely, when a seller delivers nonconforming goods, it is a breach of warranty. Id. Under the Uniform Commercial Code (“UCC”), breach of contract damages are available for failure to perform, but not for delivery of nonconforming goods. Id. We believe that the Chilton court makes a definitive distinction between failure to conform and failure to deliver. See id.

Because Ellis’s claim is based on the receipt of defective goods, he has a breach of warranty cause of action, not a breach of contract case. See S.W. Bell, 811 S.W.2d at 576; Roy v. Howard-Glendale Funeral Home, 820 S.W.2d 844, 848 (Tex.App.-Houston [1st Dist.] 1991, writ denied) (holding that buyers of defective burial vault had breach of warranty claim; therefore, breach of contract instruction improper).

Case law holds that breach of contract remedies are available when a seller fails to make any delivery “as promised.” See, e.g., S.W. Bell, 811 S.W.2d at 576. In other words, failure to conform is a breach of warranty; whereas failure to deliver is a breach of contract. See id. If the dissent is correct, then breach of contract claims would subsume all breach of warranty claims.

The dissent states, “After accepting nonconforming goods a buyer can still recover breach of contract damages to compensate for the effects of the nonconformity as long as notice of the breach has been timely given to the seller.” In support, the dissent cites section 2.714(a) of the Business and Commerce Code. However, neither this section nor the comments specifically mention “breach of contract.”2 In S.W. Bell, the supreme court instructs us otherwise by interpreting this section to mean that “the remedies for breach of warranty ... are set forth in section 2.714” and “the remedies for breach of contract are set forth in section 2.711.” S.W. Bell, 811 S.W.2d at 576. Therefore, even if Ellis accepted the goods, discovered they were defective, and gave timely notice to the seller, his remedy would be breach of warranty under section 2.714, not breach of contract under section 2.711. See id.

The dissent criticizes the majority opinion for failing to “account for a situation where goods are rejected after delivery” and for conflicting with the law of revocation. Nowhere in Ellis’s petition is there a reference to either issue. We do not address issues that are not pleaded. Moreover, Ellis neither asserts these arguments in his appellate brief nor provides any authority; therefore they are not properly preserved for appellate review. See Tex. R.App. P. 38.1(h).

The first point of error is overruled.

Breach of Contract: Limitations

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68 S.W.3d 894, 47 U.C.C. Rep. Serv. 2d (West) 992, 2002 Tex. App. LEXIS 1180, 2002 WL 221492, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ellis-v-precision-engine-rebuilders-inc-texapp-2002.