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2004-UP-354 - Weldon v. Tiger Town RV and Marine Center

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Unpublished Opinion No. 2004-UP-354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Withdrawn, Substituted, and Refiled, August 18, 2004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 court’s 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 boat’s 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 boat’s 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 boat’s 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 Town’s motion on the revocation of acceptance claim.  However, it denied Tiger Town’s 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 seller’s 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 Weldon’s 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 court’s grant of summary judgment on this issue as to Brunswick and Tracker Marine.

As to Weldon’s claim for revocation against Tiger Town, we hold the trial court erred in granting summary judgment. 

In granting Tiger Town’s motion, the trial court stated that Weldon’s 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 buyer’s 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 car’s defects would be cured thus delaying the buyer’s 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 Weldon’s 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 buyer’s 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 Nat’l 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 Brunswick’s warranty manual until he picked up the boat the next day.  Weldon asserts he never received any warranty information from Tracker.  In Brunswick’s 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 Brunswick’s and Tracker’s 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 Weldon’s claims for breach of warranty. 

Conclusion

The trial court’s grant of summary judgment to Brunswick and Tracker on Weldon’s cause of action for revocation is affirmed.  The grant of summary to Tiger Town on the revocation cause of action is reversed.  The trial court’s grant of summary judgment to Brunswick and Tracker on Weldon’s 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.