Mullins v. Wyatt

887 S.W.2d 356, 25 U.C.C. Rep. Serv. 2d (West) 715, 1994 Ky. LEXIS 133, 1994 WL 659429
CourtKentucky Supreme Court
DecidedNovember 23, 1994
DocketNo. 93-SC-758-DG
StatusPublished
Cited by4 cases

This text of 887 S.W.2d 356 (Mullins v. Wyatt) is published on Counsel Stack Legal Research, covering Kentucky Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mullins v. Wyatt, 887 S.W.2d 356, 25 U.C.C. Rep. Serv. 2d (West) 715, 1994 Ky. LEXIS 133, 1994 WL 659429 (Ky. 1994).

Opinions

LAMBERT, Justice.

The issue presented is whether KRS 355.2-607(3)(a) makes pre-litigation notice a condition precedent to a civil action for breach of warranty of title, or whether service of the summons and complaint satisfies the notice requirement. As this issue appears to be of first impression, we granted discretionary review.

The facts are uncomplicated. On or about May 20, 1988, appellee Wyatt purchased a 1984 Chevrolet Corvette automobile from appellant Mullins for the sum of $15,000. Prior to the purchase, Wyatt searched the title in the appropriate Kentucky County Court Clerk’s office and in the states of Indiana and Ohio. The examination revealed no title defect. About eighteen months after the purchase, however, the Kentucky State Police seized the automobile from Wyatt as a stolen motor vehicle.1

Wyatt attempted to contact Mullins but learned that he had moved to the State of Florida. With the assistance of an attorney and an investigator in Florida, Mullins was promptly located. According to the evidence, Wyatt learned Mullins’ whereabouts in January of 1990, but for the next ten months, Wyatt did not notify Mullins or take any other action by which Mullins would have learned of the motor vehicle seizure. Notice was first given in November of 1990 when Wyatt filed a civil action against Mullins and caused a summons and complaint to be served on him. After service of the summons and complaint, Mullins brought a third-party claim against his vendor, appellee Danny L. Meade.2

In due course, Mullins moved for summary judgment on the grounds that Wyatt had not complied with KRS 355.2-607(3)(a) by failing to give pre-litigation notice of breach of war[357]*357ranty of title. The motion was sustained and judgment was rendered in favor of Mullins. Wyatt’s complaint was dismissed with prejudice. Wyatt appealed to the Court of Appeals.

A divided panel of the Court of Appeals reversed. The issue was stated as follows:

... whether the service of a summons and an accompanying complaint can satisfy the notice requirement of KRS 355.2-607(3)(a). If not, no notice was given, and there is no issue as to whether or not the notice was reasonably timely. Consequently, Wyatt’s complaint would be deficient, and Mullins would be entitled to a judgment in his favor on that complaint as a matter of law. However, if the complaint can serve as notice under KRS 355.2-607(3)(a), then whether such notice was given within a reasonable time would be a genuine issue of a material fact, making summary judgment improper under the standard announced in Steelvest, Inc. v. Scansteel Service Center, Inc., Ky., 807 S.W.2d 476 (1991).

Reasoning appropriately from our decision in Leeper v. Banks, Ky., 487 S.W.2d 58 (1972), the Court of Appeals held that notice by means of litigation was sufficient, for if Leeper had intended to exclude the commencement of litigation as notice, whether it was given in a reasonable time would have been superfluous. It concluded that as timeliness was addressed and held to be decisive, failure to give pre-litigation notice was not fatal to the claim.

The statute before the Court, KRS 355.2-607(3)(a), is as follows:

(3) Where a tender has been accepted
(a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; ...

At the outset, we observe that the statutory requirements are inexplicit and probably ambiguous. At best there is an implication that notice must be given prior to the commencement of litigation, but the statute is silent as to the content of the notice or even whether it must be in writing. The major emphasis seems to be upon notice “within a reasonable time,” the construction given in Leeper v. Banks, supra. In sum, there is a dissonance between the casual tone of the statute and a result so draconian as dismissal.

In contrast to the statute here is KRS 376.010, the mechanic’s and materialman’s lien statute, a true pre-litigation notice statute. In unmistakable terms, acquisition of a lien and an action for its enforcement must follow the particularity of the statute and there could be no legitimate doubt that the notice provisions represent conditions precedent. Laferty v. Wickes Lumber Co., Ky. App., 708 S.W.2d 107 (1986). In Laferty, the court analyzed the purpose of notice requirements and its conclusions are worthy of repetition here. First, observance of the requirements of the mechanic’s lien statute permits a creditor to convert an unsecured debt into one secured by a lien upon the owner’s real property even though they have not dealt with one another. Such a structural change alone is sufficient to justify the requirement of pre-litigation notice. Second, the purpose of the notice statute is to inform the owner of the nature and amount of the claim so that he may protect himself in future dealings with the middle man, usually a contractor, and retain funds with which to pay the supplier or require the middle man to discharge the indebtedness. Neither of these reasons for pre-litigation notice is applicable when the claim is for breach of warranty of title.

We are well aware that text writers and most decisional law treat pre-litigation notice as a condition precedent to the bringing of a civil action for breach of warranty. An examination of the authorities reveals that the only substantial reason for the requirement is the opportunity for settlement, sometimes expressed as performance or cure. This is stated in Leibson and Nowka, Kentucky Uniform Commercial Code (2d ed.) § 2.4(b)(2) as follows:

Filing of a lawsuit should not ordinarily suffice as a section 2 — 607(3)(a) notification even if done within a reasonable time after the buyer discovers the breach. Even though claims are often settled after suit is filed, the underlying goal of the notice requirement of section 2-607(3)(a) is to facilitate performance or settlement. The [358]*358filing of a lawsuit does not ordinarily accomplish this goal.

A similar view appears in 67A AmJur2d, Sales § 1258, and 3 Williston on Sales (4th ed.) § 22-11.

In our view, an opportunity for pre-litigation settlement is simply insufficient to justify holding claims for breach of warranty without pre-litigation notice to be barred, particularly when proponents of the requirement acknowledge that it could be met by a mere telephone call immediately before the suit is filed.

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Bluebook (online)
887 S.W.2d 356, 25 U.C.C. Rep. Serv. 2d (West) 715, 1994 Ky. LEXIS 133, 1994 WL 659429, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mullins-v-wyatt-ky-1994.