Safeway Stores, Inc. v. Certainteed Corp.

710 S.W.2d 544, 1 U.C.C. Rep. Serv. 2d (West) 1237, 29 Tex. Sup. Ct. J. 345, 1986 Tex. LEXIS 966
CourtTexas Supreme Court
DecidedMay 7, 1986
DocketC-3838
StatusPublished
Cited by89 cases

This text of 710 S.W.2d 544 (Safeway Stores, Inc. v. Certainteed Corp.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Safeway Stores, Inc. v. Certainteed Corp., 710 S.W.2d 544, 1 U.C.C. Rep. Serv. 2d (West) 1237, 29 Tex. Sup. Ct. J. 345, 1986 Tex. LEXIS 966 (Tex. 1986).

Opinions

McGEE, Justice.

This case involves a contract for the sale of goods governed by the Texas Business & Commerce Code. Safeway Stores sued Certainteed Corporation and Certainteed Products Corporation for alleged breach of express and implied warranties in connection with roofing material affixed to Safeway’s warehouse roof. The trial court granted an instructed verdict for Certain-teed because Safeway failed to prosecute its claim within the statute of limitations. The court of appeals affirmed the trial court’s judgment. 687 S.W.2d 22. We must decide whether Certainteed’s express and implied warranties explicitly extend to future performance under Tex.Bus. & Com. Code Ann. § 2.725(b) (Tex.UCC) (Vernon 1968) so that Safeway’s cause of action did not accrue until discovery of the breach. Because we hold there is a fact issue whether Certainteed’s express warranties explicitly extend to future performance, we reverse the judgment of the court of appeals and remand the cause to the trial court.

In 1970, Safeway Stores contracted with Herman Smith & Company to build a warehouse. Herman Smith subcontracted with Gunn & Briggs to install a roof. The original plans and specifications called for a “20-year bonded type built-up roof.” Gunn & Briggs contacted Certainteed to supply roofing material. Certainteed advertised that its “Dual 80” two-ply roof was “bonda-ble up to 20 years.” The Safeway/Herman Smith contract was amended to include the “Dual 80” roof and construction of the roof was completed in 1970.

Safeway first experienced leaks in the roof in 1977. Nine years after the roof was completed, in 1979, Safeway filed this action against Certainteed alleging breach of express and implied warranties. The trial court granted an instructed verdict for Certainteed.

Safeway appealed. The court of appeals affirmed the trial court’s judgment, holding that Certainteed’s advertisement did not create a warranty that explicitly extended to future performance. Thus, Safeway’s action was barred by the four-year statute of limitations as suit was brought nine years after the roof was “delivered.” Tex. Bus. & Com.Code Ann. § 2.725 (Tex.UCC) (Vernon 1968).

Safeway contends that Certainteed’s implied and express warranties covering its roofing material fall under the exception to section 2.725. It argues that the warranties explicitly extended to future performance; therefore, the four-year statute of limitations should not begin to run until discovery of the breach, i.e., the roof started leaking.

The purpose of a statute of limitations is to establish a point of repose and to terminate stale claims. Society’s interest in repose is to have disputes either settled or barred within a reasonable time. It is based on the theory that the uncertainty and insecurity caused by unsettled claims hinder the flow of commerce. See Wood v. Carpenter, 101 U.S. [11 OTTO] 135, 139, 25 L.Ed. 807 (1879). The limitations statute prevents fraudulent and stale claims from springing up many years after a sale and avoids the attendant problems of litigating [546]*546a claim when memories have faded and documents have been destroyed.

As a statute of limitations, section 2.725 seeks to balance two conflicting social policies. If implied warranty liability extends past a definite time, merchants will not be able to close their books with certainty; yet, if merchants are allowed to close their books with certainty; buyers who later discover defects will have no remedy. Section 2.725 states:

(a) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued ...
(b) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.

Tex.Bus. & Com.Code Ann. § 2.725 (Tex. UCC) (Vernon 1968). The language of the statute clearly states that a cause of action in breach of warranty arising from a contractual relationship accrues at the time of delivery, not at the time of discovery. This occurs “regardless of the aggrieved party’s lack of knowledge of the breach” unless the exception applies. Id.

The drafters’ intentions were to establish a reasonable period of time, four years, beyond which business persons need not worry about stale warranty claims. Standard Alliance Industries v. Black Clawson Co., 587 F.2d 813, 820 (6th Cir.1978). The Code seeks “to make uniform the law among the various jurisdictions” to provide “needed relief for concerns doing business on a nationwide scale.” Tex.Bus. & Com. Code Ann. § 1.102(b)(3) and § 2.725 comment (Tex.UCC) (Vernon 1968). Adoption of a uniform date of accrual and rejection of the discovery rule in warranty cases is a permissible means adopted by the state legislatures to protect commercial transactions. This end would not have been accomplished had the legislatures merely adopted a four-year statute of limitations without specifying when the statute would begin to run.

It is clear that a buyer and a seller can freely negotiate to extend liability into the future; that is why specific allowance was made for warranties “explicitly” extending to future performance. Black Clawson Co., 587 F.2d at 820. Then, the warranty cause of action does not accrue until discovery of the breach. Tex.Bus. & Com. Code Ann. § 2.725(b) (Tex.UCC) (Vernon 1968).

IMPLIED WARRANTY

Implied warranties relate to the condition, kind, characteristics, suitability, etc. of sold goods at the time of sale; thus, the statute of limitations on implied warranties runs from the date of sale. Iowa Manufacturing Co. v. Joy Manufacturing Co., 669 P.2d 1057, 1060 (Mont.1983). See Citizens Utilities Co. v. American Locomotive Co., 11 N.Y.2d 409, 417, 230 N.Y.S.2d 194, 198, 184 N.E.2d 171, 174 (1962); Allen v. Todd, 6 Lans. 222 (N.Y.1872). The drafters of the Uniform Commercial Code intended to reserve the benefits of an extended warranty to those who explicitly bargained for them. Raymond-Dravo-Langenfelder v. Microdot, Inc., 425 F.Supp. 614, 618 (D.Del.1976). Therefore, only express warranties may explicitly extend to future performance. Dickerson v. Mountain View Equip. Co., 109 Idaho 711, 710 P.2d 621, 626 (1985); G.M. v. Tate, 257 Ark. 347, 352, 516 S.W.2d 602, 606 (1974); Wilson v. Massey-Ferguson, Inc., 21 Ill.App.3d, 867, 315 N.E.2d 580, 583 (1974); South Burlington School District v. Calcagin-Frazier-Zajchowski Architects, Inc., 138 Vt. 33, 410 A.2d 1359, 1366 (1980); Wright v. Cutler-Hammer, Inc., 358 So.2d 444, 445-46 (Ala.1978). Annot., 93 A.L.R.3d 690 § 2 (1979); 67 Am.Jur.2d, Sales § 700 (1985).

[547]*547The Code did not intend that an implied warranty could be explicitly extended to future performance. The words “explicit” and “implied” are contradictory.

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Bluebook (online)
710 S.W.2d 544, 1 U.C.C. Rep. Serv. 2d (West) 1237, 29 Tex. Sup. Ct. J. 345, 1986 Tex. LEXIS 966, Counsel Stack Legal Research, https://law.counselstack.com/opinion/safeway-stores-inc-v-certainteed-corp-tex-1986.