Oda Nursery, Inc. v. Garcia Tree & Lawn, Inc.

708 P.2d 1039, 103 N.M. 438
New Mexico Supreme Court·Decided November 1, 1985·No. 15668·Published·Cited by 5 cases

Opinion

OPINION

WALTERS, Justice.

Plaintiff Oda Nursery, Inc. sued defendant Garcia Tree & Lawn, Inc. to recover the purchase price on a contract for the sale of 985 spreading juniper plants. Garcia counterclaimed for breach of contract, alleging that the plants were not of the quality warranted. The trial court found that Oda had provided .root-bound plants and that Garcia had effectively rejected them. Judgment was entered against Oda in the amount of $17,783.32, plus interest. Plaintiff appeals, arguing that there was no substantial evidence to support the trial court’s findings that the plants were defective nor that Oda breached its warranties of fitness and merchantability. Oda also argues that Garcia’s rejection of the plants was ineffective and untimely. We agree with the latter argument, and reverse.

Garcia ordered the plants in early 1982, intending to use them in a beautification project for the City of Albuquerque. On March 13, 1982, Oda’s employee Velasco inspected the plants, and within 24 hours they were shipped to Albuquerque. On arrival they were inspected by one of Garcia’s employees, and a representative of the city examined them sometime between arrival and the time they were planted. For the four months following delivery the plants remained in their 5-gallon shipping containers. Garcia watered and fertilized them throughout that time. Finally, in July and August 1982, the junipers were planted but, by October, some of them had begun to die. Approximately 350 of the plants were removed at that time, and 350 more were removed in the following months.

One of Garcia’s employees testified that she had called Oda soon after the arrival of the plants to complain of their poor condition and that Oda had agreed to send an agent to inspect the plants. Oda, on the other hand, denied that the alleged conversation ever occurred.

On December 8, 1982, Oda filed suit for payment. Garcia answered on February 25, 1983, which, according to Oda, was the first notice it had received regarding any defects in the plants. When an inspection of the dying shrubs was made by Garcia eleven months after the plants had been delivered, he discovered they were root-bound.

I. Substantial Evidence

Plaintiff objects to certain of the trial court's findings of fact and conclusion of law as not supported by substantial evidence.

We have said repeatedly that the trial court’s findings will not be disturbed on appeal if they are supported by the evidence. Wilson v. Employment Security Commission, 74 N.M. 3, 389 P.2d 855 (1963). When reviewing for substantial evidence, the appellate court resolves all disputed questions of fact in favor of the successful party and all reasonable inferences are indulged in support of the judgment. Boone v. Boone, 90 N.M. 466, 467, 565 P.2d 337, 338 (1977); Tapia v. Panhandle Steel Erectors Co., 78 N.M. 86, 428 P.2d 625 (1967).

We would agree that some of the trial court’s findings are not supported by substantial evidence, and that some are indeed conclusions of law. Our determination of this appeal rests, however, upon the legal issues of revocation and rejection; thus, the challenged findings (most of which really are conclusions) are immaterial to our decision.

II. Rejection and Revocation

The trial court found and concluded that Garcia had made a timely and effective rejection and revocation of acceptance of the juniper plants. The evidence and other findings do not support that conclusion.

The agreement between Oda and Garcia qualifies as a “contract” (NMSA 1978, § 55-1-201) for the sale of “goods” (NMSA 1978, § 55-2-105), and as such is governed by the provisions of the Uniform Commercial Code (NMSA 1978, §§ 55-1-101 to 55-9-507). Even assuming that Oda breached warranties of fitness and merchantability, as the trial court concluded, Section 55-2-602(1) of the UCC provides that:

Rejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller.

(A) Effectiveness

Section 55-1-201(26) of the UCC describes the act of “notification”:

[A] person “notifies” or “gives” a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it.

The trial court found that one of Garcia’s employees notified the plaintiff of the “deterioration” of the plants by telephone shortly after the plants arrived. Although later communications between the parties made no mention of such notice, and Garcia made a partial payment for the shrubs two-and-a-half months after receiving the shipment, the trial court was entitled to believe that Garcia telephoned Oda. The telephone call fulfills the requirements of Section 55-1-201.

Nevertheless, when the notice in question regards rejection or revocation of acceptance because of a defect in the goods, the provisions of Sections 55-2-602, 55-2-605 and 55-2-608 must be met as well. Section 55-2-602 requires rejection “within a reasonable time after * * * delivery,” and makes any rejection ineffective if the seller is not seasonably notified. Section 55-2-605 provides:

(1) The buyer’s failure to state in connection with rejection a particular defect which is ascertainable by reasonable inspection precludes him from relying on the unstated defect to justify rejection or to establish breach:
(a) where the seller could have cured it if stated seasonably * * * * (Emphasis supplied.)

And, under Section 55-2-608, a buyer may revoke acceptance within a reasonable time after he discovers, or should have discovered, grounds for revocation and before any change in the condition of the goods has occurred. The seller must be notified that acceptance is revoked or revocation is ineffective.

According to Garcia’s witness, her telephone call was to the effect that the plants did not look “up to snuff.”

The evidence on notification given by the person who made the notification nowhere describes a “deteriorating” or root-bound condition. Nor is there evidence of notice of either rejection or revocation of acceptance in the telephone conversations or correspondence between the parties. Indeed, partial payment in June, 1982, following the March 1982 delivery, belies any rejection or revocation based on March or April telephone calls from Garcia to Oda. A check from Garcia for the balance of payment on July 20, 1982, was returned to Oda marked “Insufficient Funds” on August 8, 1982. The letter from Garcia accompanying the check, read:

GENTLEMEN:

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Oda Nursery, Inc. v. Garcia Tree & Lawn, Inc., 708 P.2d 1039, 103 N.M. 438 (N.M. 1985).

708 P.2d 1039 (Oda Nursery, Inc. v. Garcia Tree & Lawn, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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