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2011-UP-072 - Jenner Trucking v. Pioneer Machinery

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Jenner Trucking & Construction, Inc., Appellant,

v.

Pioneer Machinery, LLC, and Peterson Pacific Corp.,

of whom Pioneer Machinery, LLC, is Respondent.


Appeal From Dorchester County
James C. Williams, Jr., Circuit Court Judge


Unpublished Opinion No.  2011-UP-072
Submitted November 1, 2010 – Filed February 23, 2011


AFFIRMED


Steven L. Smith, of N. Charleston, for Appellant.

Steven A. McKelvey, Christopher C. Genovese and Thomas William McGee, III, all of Columbia, for Respondent.

PER CURIAM: In this action for breach of express warranty, breach of implied warranty of merchantability, fraudulent misrepresentation, and conversion, Jenner Trucking and Construction (Jenner Trucking) appeals the grant of summary judgment to Defendant Pioneer Machinery (Pioneer).  We affirm.[1]

In 2003, Jenner Trucking purchased an HC-4400-B Waste Recycler ("grinder") manufactured by Peterson Pacific Corp. (Peterson) from Pioneer for use in its land clearing business.  Timothy Jenner, the president and sole shareholder of Jenner Trucking, finalized the purchase after a trial period during which Jenner Trucking's head mechanic noticed numerous problems with the machine that indicated it had "been sitting up for a while."  Within six months of the date of purchase, the clutch on the grinder malfunctioned.  Pioneer replaced the clutch at no cost to Jenner Trucking, but it malfunctioned again less than a month later.  This time, however, although Pioneer repaired the grinder, it refused to return it to Jenner until he paid the $12,000 repair bill, which Jenner did about a year later. 

Jenner Trucking then filed the present lawsuit against Pioneer and Peterson, asserting claims for breach of express and implied warranties, fraudulent misrepresentation, and conversion.  Both defendants moved for summary judgment after filing responsive pleadings, and the trial judge conducted separate hearings on the motions.  The trial judge then granted summary judgment to Pioneer, holding (1) Pioneer did not provide an express warranty to Jenner Trucking, (2) Jenner Trucking's claim for breach of implied warranty of merchantability failed as a matter of law because of the disclaimer on the sales contract, (3) Jenner Trucking's fraudulent misrepresentation failed as a matter of law because any reliance on any alleged misrepresentation would be unreasonable, and (4) Pioneer did not convert the grinder for its own use.  In a separate order, the trial judge granted only partial summary judgment to Peterson, holding (1) there were questions of fact as to whether Peterson complied with the terms of its express limited warranty, (2) Peterson had effectively disclaimed the implied warranty of merchantability, (3) there was no evidence that Peterson made any false statements to induce Jenner to purchase the grinder and Jenner's reliance on any such false representations would have been unreasonable, and (4) Jenner's claim for lost profits was speculative and was disclaimed under the express limited warranty.

Jenner Trucking unsuccessfully moved for reconsideration of both orders and then filed a notice of appeal.  While the appeal was pending in this court, Jenner Trucking settled its claim against Peterson.

1.  Jenner Trucking argues the trial judge erred in finding the disclaimer on the sales contract effectively disclaimed any possible warranties, express or implied, on the grinder.  In support of his argument that the disclaimer was invalid, Jenner Trucking points out that (1) the front page of the document contained an express warranty, which, under section 36-2-316(1) of the South Carolina Code (2003), Pioneer could not disclaim in the same agreement[2] and (2) although the disclaimer complied with the technical requirements of the South Carolina Uniform Commercial Code, it was not truly "conspicuous" as that term is used in section 36-2-316(2).  We disagree with these arguments.

Counsel for Jenner Trucking argued to the trial judge that Jenner believed the express warranty included in the sales agreement came from Pioneer rather than Peterson; however, during his deposition, Jenner responded affirmatively to a question regarding whether he "received the Peterson Pacific manufacturer warranty of nine months, a thousand hours."   Furthermore, there is nothing in the record suggesting Pioneer gave Jenner Trucking an express warranty on the grinder.  We therefore hold the trial judge was correct in determining that the only express warranty at issue here was issued by Peterson, the manufacturer of the grinder.  Pioneer never attempted to disclaim any warranty issued by Peterson; therefore, section 36-2-316(1), which prohibits such disclaimers, is not applicable here.

2.  Jenner Trucking further contends there is a genuine issue of material fact regarding whether the disclaimer was conspicuous.  We disagree.  The disclaimer included the word "merchantability" and was set off in block letters rather than lower case letters; therefore, it satisfied the relevant statutory requirements to be effective.  Jenner Trucking, though acknowledging this contrast in type, argues the paragraph following the disclaimer was also in block letters and contends this creates a genuine issue of material fact regarding conspicuousness.  In contrast to the following paragraph, however, the disclaimer was also italicized.  We therefore affirm the trial judge's determination that the disclaimer of the warranty of merchantability satisfied the relevant statutory requirements.  See S.C. Code Ann. § 36-2-316(2) (2003) (requiring exclusions or modifications of the implied warranty of merchantability to mention merchantability and to be in writing and conspicuous); id. § 36-1-201(10) (stating "[l]anguage in the body of a form is 'conspicuous' if it is in larger or other contrasting type or color" and specifying that "[w]hether a term or clause is 'conspicuous' or not is for decision by the court") (emphasis added).

3.  Jenner Trucking complains that although the trial judge properly denied Peterson's summary judgment motion with respect to the express warranty it provided, the trial judge incorrectly granted summary judgment to Peterson based on the disclaimer language in the sales contract, to which Peterson was not a party.  Because Peterson has been dismissed with prejudice from this appeal, it is unnecessary to address this issue.

4.  Jenner Trucking next contends significant material factual disputes remain regarding its claims for fraudulent misrepresentation, namely, that contrary to Jenner's intention to purchase a "like new" machine that was in good shape, had no previous problems, and would not require extensive maintenance in the near future, the grinder Pioneer sold him was about seven years old and had been sitting on Pioneer's lot for much of that time without maintenance.  Jenner Trucking further challenges the trial judge's reasoning that because Jenner had actual knowledge that the grinder had been previously operated with approximately forty to sixty hours of prior use, he could not have justifiably relied on the description in the contract that it was "new," arguing the questions regarding reasonable reliance generally involve factual determinations.  We disagree.

Jenner Trucking is correct that issues of reliance are generally determined by the finder of fact; however, "if the undisputed evidence clearly shows the party asserting reliance has knowledge of the truth of the matter, there is no genuine issue of material fact." Quail Hill, LLC v. County of Richland, 387 S.C. 223, 240, 692 S.E.2d 499, 508 (2010) (citing Gruber v. Santee Frozen Foods, Inc., 309 S.C. 13, 20, 419 S.E.2d 795, 800 (Ct. App. 1992)).  See also Whitman v. Seaboard Air Line Ry., 107 S.C. 200, 204, 92 S.E. 861, 863 (1917) ("[E]ven if there had been fraud, its effect was destroyed by the abundant opportunity to learn the truth.").  Here, it was undisputed that (1) Jenner held himself out as an expert in grinders and had purchased several machines in the past, (2) Jenner could have easily determined the age and condition of the grinder before buying it by using the serial number or requesting the maintenance records from Pioneer, and (3) Jenner's own mechanic warned him of problems he had observed during the demo period.  The record supports the trial judge's determination that Jenner could not have reasonably relied on any alleged misrepresentations made by Pioneer's employees.

5.  Jenner Trucking argues the trial judge erred in requiring definitive proof of lost profits and cites authority that the law does not require absolute certainty before lost profits can be recovered.  See Collins Holding Corp. v. Landrum, 360 S.C. 346, 350, 601 S.E.2d 332, 333-34 (2004).  This ruling appears only in the order granting partial summary judgment to Peterson.  Because Peterson has been dismissed from this appeal, we do not believe it is necessary to address this issue, particularly in view of our proposed disposition to affirm on the remaining issues.

6.  Jenner Trucking next argues the trial judge erred in dismissing its conversion claim on the ground that it was "simply a restatement of its breach of warranty claims under a different name."  It further contends the second repair that Pioneer made to the clutch system was unauthorized and therefore amounted to conversion.  We find no reversible error.

In its complaint, Jenner Trucking made no reference to unauthorized repairs to the grinder as the basis for its conversion claim.  During discovery, Jenner Trucking, in response to an interrogatory from Pioneer requesting all facts and circumstances to support its contention that Pioneer converted the grinder to its own use in derogation of Jenner Trucking's property rights, stated only that "[a]fter repairing the clutch, Pioneer refused to cover the repairs under the warranty.  The Defendant further refused to place the amount due onto the Plaintiff[']s parts account."  Furthermore, contrary to Jenner Trucking's argument on appeal that the basis for its conversion claim was "an assertion for unauthorized repairs," during the summary judgment hearing, counsel for Jenner Trucking did not specifically assert that Jenner instructed Pioneer not to perform any repairs that were not covered by warranty.  Under these circumstances, we agree with the trial judge that Jenner Trucking's conversion claim was merely a restatement of its claims for breach of warranty.  See Langehans v. Smith, 347 S.C. 348, 353, 554 S.E.2d 681, 684 (Ct. App. 2001) (holding an issue was not preserved for appeal because the appellants "did not raise this specific argument to the trial court"). 

7.  Finally, Jenner Trucking contends the trial judge failed to apply the proper standard in granting summary judgment to Pioneer.  We have determined that there are no issues of material fact warranting the denial of summary judgment on any of the specific issues involved in this appeal and likewise hold the trial judge did not fail to apply the proper standard in granting summary judgment.

CONCLUSION

For the foregoing reasons, we affirm the grant to summary judgment to Pioneer.

AFFIRMED.

THOMAS, PIEPER, and GEATHERS, JJ., concur.


[1]  We decide this case without oral argument pursuant to Rule 215, SCACR.

[2] Section 36-2-316(1) reads as follows:  "If the agreement creates an express warranty words disclaiming it are inoperative."