THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE
239(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Harmon James Weldon,
Appellant,
v.
Tiger Town RV and Marine Center, Inc., Tracker Marine, LP, and Brunswick
Corporation, Inc., Respondents.
Appeal From Pickens County
Henry F. Floyd, Circuit Court Judge
Unpublished Opinion No. 2004-UP-354
Submitted May 12, 2004 Filed June
3, 2004
Withdrawn, Substituted, and Refiled,
August 18, 2004
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED IN PART
Rivers Lawton McIntosh, of Anderson, for Appellant.
Charles E. Carpenter, S. Elizabeth Brosnan, Leslie A. Cotter,
Jr., all of Columbia; and Christopher G. Olson and C. Nicholas Lavery, both
of Clemson; and Peter G. Siachos, of Greenville, for Respondents.
PER CURIAM: In this consumer litigation
action over the purchase of a boat, Harmon Weldon appeals the trial courts
grant of summary judgment to Tiger Town RV and Marine Center, Inc., Tracker
Marine, L.P., and Brunswick Corporation, Inc. on claims for breach of warranty
and revocation of acceptance. We affirm in part and reverse and remand in part.
FACTS
On February 28, 2001, Weldon purchased
a 2000 Procraft 190 SuperPro boat with a 175 horsepower Mercury engine from
Tiger Town RV and Marine Center. Weldon signed the contract and made a down
payment of $2,500.00 that day. He returned the following day to retrieve the
boat. At that time, he was given an In Service Checklist and a Brunswick Outboard
Operation, Maintenance & Warranty Manual. In the manual, Brunswick limited
its obligation under the warranty to repairing a defective part, or at its option,
refunding the purchase price or replacing the part. It also disclaimed the implied
warranties of merchantability and fitness and excluded all incidental and consequential
damages. Weldon asserted he never received a manual or warranty booklet from
Tracker Marine. However, he acknowledges that if such a warranty is in effect,
it is the same as that provided by Brunswick.
Weldon has experienced numerous problems
with the boat. Even before he picked it up, the boat had a blown fuse. On
March 2, 2001, before Weldon had even put the boat in the water, he discovered
a fuel leak. The boat also needed work on the live well and ignition at this
time. On March 8, Weldon again had problems related to the motor. The engine
would cut off when engaging the trim and the trim gauge did not work properly.
The boat would also lose power and fail to accelerate. Tiger Town placed a
call to Brunswick regarding a blown fuse and voltage regulator problem during
this service visit. Around March 14, 2001, Weldon brought the boat back to
Tiger Town after experiencing problems with the boats alarm system sounding
when the boat hit waves. There was also a problem with the storage compartment
lid. Around April 21, 2001, Weldon again had problems with the boat losing
power and had difficulty starting it. The cranking battery died and the boat
would not plane off. Through May and June of 2001, Weldon continued to have
problems with the boat planning off, the tilt/trim gauge, the starting battery,
and the trolling motor. He also had a problem with the boats fabric cover
and compartment covers. Weldon again returned the boat to Tiger Town with
an enumerated list of problems and instructions to keep the boat until all the
problems were fixed. The boat stayed at Tiger Town for six to seven weeks.
When Weldon discovered that all of the problems had not been addressed, his
attorney delivered a letter to Tiger Town dated August 15, 2001, explaining
that Weldon revoked his acceptance of the boat. Around this same time, Weldon
took the boat to test it on the lake, but it would not start.
On October 24, 2001, Weldon brought suit
alleging causes of action for breach of warranty and revocation of acceptance
against Brunswick, Tracker, and Tiger Town. Subsequent to Weldon bringing this
action, another wiring problem with the boat was discovered and repaired. After
this repair, Tim Marlowe, a Technical Account Manager for Brunswick, inspected
the boat and took the boat out on the water. He stated in his affidavit that
there was no nonconformity or defect regarding the motor. However, he acknowledged
Weldon had alleged that the tilt/trim gauge on the boats console was not properly
calibrated.
Tiger Town, Brunswick, and Tracker moved
for summary judgment. The trial court granted the motions of Brunswick and
Tracker as to all causes of action. The court also granted Tiger Towns motion
on the revocation of acceptance claim. However, it denied Tiger Towns motion
on the breach of warranty claim, determining an issue of fact existed as to
whether certain oral statements were permissible puffing or created an express
warranty. This appeal followed.
STANDARD OF REVIEW
To obtain summary judgment, the moving
party must demonstrate there is no genuine issue of material fact and the moving
party is entitled to a judgment as a matter of law. Wilson v. Moseley,
327 S.C. 144, 146, 488 S.E.2d 862, 863 (1997). In deciding a motion for summary
judgment, the court must view the evidence and the inferences that can be drawn
therefrom in the light most favorable to the non-moving party. Id. Summary
judgment should not be granted even when there is no dispute as to the evidentiary
facts, if there is a dispute as to the conclusions to be drawn therefrom.
Laurens Emergency Med. Specialists, P.A. v. M.S. Bailey & Sons Bankers,
355 S.C. 104, 108-09, 584 S.E.2d 375, 377 (2003).
LAW/ANALYSIS
Revocation of Acceptance
Weldon argues the trial court erred in
granting summary judgment to all defendants on the revocation of acceptance
cause of action. We agree in part.
The South Carolina Uniform Commercial
Code (UCC) sets forth the elements for revocation of acceptance as follows:
(1) The buyer may revoke his acceptance of a lot or commercial
unit whose nonconformity substantially impairs its value to him if he has accepted
it
(a) on the reasonable assumption that its nonconformity would
be cured and it has not been seasonably cured; or
(b) without discovery of such nonconformity if his acceptance
was reasonably induced either by the difficulty of discovery before acceptance
or by the sellers assurances.
(2) Revocation of acceptance must occur within a reasonable
time after the buyer discovers or should have discovered the ground for it and
before any substantial change in condition of the goods which is not caused
by their own defects. It is not effective until the buyer notifies the seller
of it.
(3) A buyer who so revokes has the same rights and duties
with regard to the goods involved as if he had rejected them.
S.C. Code Ann. § 36-2-608 (2003).
As a ground for granting Brunswick and
Tracker Marine summary judgment on Weldons claim for revocation, the trial
court held, Because Brunswick and Tracker did not sell the boat to [Weldon],
[Weldon] can neither reject nor revoke acceptance of the goods as to these parties.
Weldon failed to specifically appeal this holding. Accordingly, it is the law
of the case. See ML-Lee Acquisition Fund, L.P. v. Deloitte &
Touche, 327 S.C. 238, 241, 489 S.E.2d 470, 472 (1997) (stating an unappealed
ruling is law of the case). We must therefore affirm the trial courts grant
of summary judgment on this issue as to Brunswick and Tracker Marine.
As to Weldons claim for revocation against
Tiger Town, we hold the trial court erred in granting summary judgment.
In granting Tiger Towns motion, the trial
court stated that Weldons continued use of the boat operated as an acceptance
and that his revocation was not timely made. This was error.
In Mockabee v. Wakefield Buick, Inc.,
298 S.C. 386, 380 S.E.2d 848 (Ct. App. 1989), a case cited by the trial court,
this court ruled a car buyers attempted revocation almost 22 months after the
date of purchase was not timely made. However, the court cautioned that [t]wenty-two
months is not per se untimely in all situations. Id. at. 388,
380 S.E.2d at 849. The court in Mockabee noted there was some evidence
the buyer brought the car to the dealership shortly after purchase for an oil
leak and starting problem and then brought it back three or four times sometime
during the first year of ownership to complain about problems unspecified in
the record, but there was no evidence he returned it to the dealership in the
ten months preceding his attempted revocation. Id. Furthermore, the
buyer never took the car to the service department but took it to the used car
salesman instead. The court found the evidence failed to establish the dealership
made reasonable assurances to the buyer the cars defects would be cured thus
delaying the buyers decision to revoke his acceptance. Id. Instead
it showed the buyer ignored the problems. Id. Thus, the court concluded
that based on this evidence and considering the time lapse before notice of
revocation was given, the only reasonable inference to be drawn from the evidence
is that the attempted revocation was not timely given in accordance with Section
36-2-608(2). Mockabee, 298 S.C. 388-89, 380 S.E.2d at 849.
Unlike the situation in Mockabee, throughout
the less than six months between his purchase of the boat and his letter notifying
Tiger Town that he was revoking his acceptance of it, Weldon continually delivered
the boat to Tiger Town for repairs. According to Weldon, every time he tried
to put the boat in the water, a new problem developed and he has not even used
a full tank of gas in the boat yet. The only evidence of a change in condition
of the boat is that it has a few scratches on the hull. We hold a jury could
find Weldon revoked his acceptance within a reasonable time after he discovered
or should have discovered the ground for it and before any substantial change
in condition of the boat that was not caused by its own defects.
The trial court also found as a matter
of law Weldon did not effectively revoke acceptance because he continued to
exert an ownership interest over the boat. We disagree with this finding.
When Weldon left the boat at Tiger Town
for several weeks during the summer of 2001, Tiger Town threatened to charge
him rent for storing the boat if he did not collect it. In his letter revoking
acceptance dated August 15, 2001, Weldon notified Tiger that he would maintain
possession of the boat pending a full refund. There is no evidence in the record
Weldon continued to use the boat except for testing it for additional problems.
Accordingly, we find a jury could reasonably conclude Weldon had effectively
tendered the boat to Tiger Town.
We furthermore find Weldon presented evidence
sufficient to create a genuine issue of material fact as to whether the alleged
nonconformity of the boat substantially impaired its value to Weldon. Whether
the goods have a nonconformity that substantially impairs the value of the goods
to the buyer is a subjective test. Herring v. Home Depot, 350 S.C. 373,
380, 565 S.E.2d 773, 776 (Ct. App. 2002). In addition, this is a question of
law rather than of fact. Burris v. Lake Wylie Marina, Inc., 285 S.C.
614, 615, 330 S.E.2d 559, 560 (Ct. App. 1985). As listed above, Weldon has
experienced numerous problems with the boat. He stated in an affidavit, The
repetitive nature of the electrical problems makes me [wary] about whether or
not these problems have been or could be fixed. The unrepaired problems and
the multiple continuing problems substantially impair the value of the boat
to me. We find a jury issue exists as to whether Weldon has met the subjective
test to support a cause of action for revocation of acceptance.
Accordingly, we hold the trial court erred in granting
Tiger Town summary judgment on Weldons claim for revocation of acceptance.
Breach of Warranty
Weldon contends the trial court erred
in granting the summary judgment motions of Brunswick and Tracker as to the
breach of warranty claims. We agree.
Under the UCC, the parties to a contract for the
sale of goods may establish exclusive, limited written warranties and limitation
of damages as a remedy for breach thereof. S.C. Code Ann. § 36-2-719 (2003).
The agreement may limit the buyers remedies to repair or replacement of nonconforming
goods or parts, and if such remedy is expressly agreed to be exclusive, it is
the sole remedy. Id. In addition, the agreement may limit or exclude
consequential damages unless the limitation or exclusion is unconscionable.
Id.
Weldon contends there are genuine issues of material
fact as to whether Brunswick and Tracker created limited warranties. We agree.
According to the prevailing interpretation of
the Uniform Commercial Code, a disclaimer printed on a label or other document
and given to the buyer at the time of delivery of the goods is ineffective if
a bargain has already arisen. Gold Kist, Inc. v. Citizens & Southern
Natl Bank of S.C., 286 S.C. 272, 277, 333 S.E.2d 67, 70 (Ct. App. 1985).
However, a disclaimer made after the closing of the sale can be made a binding
part of the contract if the parties agree to the modification. Id. at
277-78, 333 S.E.2d at 71. In order to support an agreement to modify, the evidence
must reveal that the buyer acquired knowledge of the offered modification and
had an opportunity to object to it. Id. at 278, 333 S.E.2d at 71.
Although Weldon signed the bill of sale on February
28, 2001, he was not given Brunswicks warranty manual until he picked up the
boat the next day. Weldon asserts he never received any warranty information
from Tracker. In Brunswicks manual, the limited warranty, disclaimer of implied
warranties, and exclusion of consequential damages appear on page nine, with
additional information on pages eight, fourteen, and fifteen. Weldon asserted
in his affidavit, The warranty was not pointed out to me or discussed with
me, and it was not until I subsequently looked through these materials that
I discovered the limited warranty. Weldon did return the boat to Tiger Town
numerous times for repairs, which were made under Brunswicks and Trackers
warranties. However, a jury could reasonably find that Weldon never agreed
to be limited to the exclusive remedy of repairing a replacement part.
Furthermore, even if the limited warranties
of both Brunswick and Tracker are in effect, a genuine issue of material fact
exists as to whether Weldon may still be entitled to the general remedies provided
in the UCC. Where circumstances cause an exclusive or limited remedy to fail
of its essential purpose, remedy may be had as provided in this act."
S.C. Code Ann. § 36-2-719(2) (2003). The official comments to this section
explain, [W]here an apparently fair and reasonable clause because of circumstances
fails in its purpose or operates to deprive either party of the substantial
value of the bargain, it must give way to the general remedy provisions of this
Article.
Where a seller is given a reasonable
chance to correct defects and the equipment still fails to function properly,
the buyer is deprived of the benefits of the limited remedy, and it therefore
fails of its essential purpose. Bishop Logging Co. v. John Deere Indus.
Equip. Co., 317 S.C. 520, 533, 455 S.E.2d 183, 191 (Ct. App. 1995). A jury
may justifiably find that the warranty operated to deprive the purchaser of
the substantial value of the bargain where the seller was unable to remedy numerous
major and minor defects within a reasonable time. Id. at 533-34, 455
S.E.2d at 191 (citing Riley v. Ford Motor Co., 442 F.2d 670 (5th Cir.
1971)). Similarly, the cumulative effect of numerous defects may substantially
impair the value of the goods to the buyer; thus, the limited warranty fails
of its essential purpose. Id. at 534, 455 S.E.2d at 191 (citing Murray
v. Holiday Rambler, Inc., 265 N.W.2d 513 (1978)).
Brunswick and Tracker assert that they have repaired
every defect in the boat pursuant to the warranties. However, the evidence
demonstrates that as each repair was made, other defects appeared. Even after
Weldon brought this action, a problem with the wiring harness was discovered.
Furthermore, the tilt-trim gauge remains defective. There is evidence in the
record that responsibility for this defect is shared by Brunswick and Tracker.
We hold a jury could reasonably find Brunswick and Tracker were unable to remedy
all of the defects in the boat within a reasonable time and that cumulative
effect of these numerous defects substantially impaired the value of the boat
to Weldon. Thus, a genuine issue of material fact exists as to whether the
limited warranty has failed of its essential purpose.
Finally, Weldon asserts it was premature
for the trial court to grant summary judgment as to incidental and consequential
damages. We agree.
S.C. Code Ann. § 36-2-719(3) (2003), provides,
Consequential damages may be limited or excluded unless the limitation or exclusion
is unconscionable. In Bishop Logging, this court held the exclusion
of consequential damages must be interpreted in light of the premise of certainty
of repair which underlay the entire contract. 317 S.C at 536, 455 S.E.2d at
192. It noted that while the parties obviously agreed to exclude consequential
damages in the event that the seller performed its obligation to repair or replace
defect, the buyer could reasonably have expected to recover consequential damages
when the defects were never adequately corrected and the limited remedy proved
ineffectual. Id. The court found the failure of the limited remedy
in this case materially altered the balance of risk set by the parties in the
agreement. Id. at 536, 455 S.E.2d at 193. Thus, this court concluded
the trial court was correct in allowing the full array of remedies provided
by the UCC, including recovery of consequential damages and incidental losses.
Id. at 536-37, 455 S.E.2d at 193.
In the present case, we find the issue
of the validity of the limitation on damages should be remanded with the above
issues. Depending on the findings of the jury in the above issues, the court
may find that the certainty of repair underlies the limited warranty agreement
and that the failure of the limited remedy has materially altered the balance
of risk set by the parties in the agreement, rendering the limitation unconscionable
and thus unenforceable pursuant to Section 36-2-719(3).
As we find genuine issues of material
fact exist as to whether the limited warranties were created, whether such warranties,
if in existence, have failed as to their essential purpose, and whether the
limitation of damages is unconscionable, we hold the trial court erred in granting
Brunswick and Tracker summary judgment on Weldons claims for breach of warranty.
Conclusion
The trial courts grant of summary judgment
to Brunswick and Tracker on Weldons cause of action for revocation is affirmed.
The grant of summary to Tiger Town on the revocation cause of action is reversed.
The trial courts grant of summary judgment to Brunswick and Tracker on Weldons
cause of action for breach of warranty is reversed. The case is remanded to
the trial court for further proceedings consistent with this opinion.
AFFIRMED IN PART AND REVERSED AND REMANDED
IN PART.
ANDERSON, HUFF, and KITTREDGE, JJ., concur.