Matthews v. Ford Motor Company

• Citation: 479 F.2d 399
• Decision Date: 21 May 1973
• Docket Number: No. 72-2306,72-2307.,72-2306
• Parties: Robert E. MATTHEWS, Appellee, v. FORD MOTOR COMPANY, a Delaware corporation, Appellant. Robert E. MATTHEWS, Appellee, v. KIMNACH FORD, INC., a Virginia corporation, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

479 F.2d 399 (1973)

Robert E. MATTHEWS, Appellee, v. FORD MOTOR COMPANY, a Delaware corporation, Appellant.

Robert E. MATTHEWS, Appellee, v. KIMNACH FORD, INC., a Virginia corporation, Appellant.

Nos. 72-2306, 72-2307.

United States Court of Appeals, Fourth Circuit.

Argued March 7, 1973.

Decided May 21, 1973.

Allan S. Reynolds, Norfolk, Va. (White, Reynolds, Smith & Winters, Norfolk, Va., on brief), for Ford Motor Co.

William E. Baggs, Norfolk, Va. (James A. Howard and Breeden, Howard & McMillan, Norfolk, Va., on brief), for Kimnach Ford, Inc.

Thomas J. Harlan, Jr., Norfolk, Va. (William L. Dudley, Jr., and Doumar, Pincus, Knight & Harlan, Norfolk, Va., on brief), for Robert E. Matthews.

Before CRAVEN, BUTZNER and RUSSELL, Circuit Judges.

BUTZNER, Circuit Judge:

Alleging numerous errors, Ford Motor Company and Kimnach Ford, Inc. appeal from a judgment, entered on a jury verdict, for personal injuries suffered by Robert Matthews when his car went out of control as a result of a mechanical defect. Finding that no reversible error was committed during the trial and that Virginia law, which governs this diversity action, supports the liability of Ford and Kimnach, we affirm.

The evidence, viewed in the light most favorable to Matthews, disclosed the following facts: Matthews purchased the car, a 1968 Ford XL Galaxie 500, from Kimnach, an authorized Ford dealer, in April 1968. In November 1968, the vehicle shifted into reverse gear while traveling forward on a rough road. Matthews returned the car to Kimnach for repairs. The defect was in the gear shift selector mechanism, which Kimnach attempted to correct under the terms of the vehicle warranty. Less than two months later the car again inadvertently shifted into reverse, this time causing a collision that severely injured Matthews.

Eyewitnesses described the car's erratic movement. The testimony of experts supported Matthews' claim that Ford's defective design and assembly and Kimnach's improper repairs allowed the transmission to reverse unexpectedly. The trial judge submitted the case to the jury on theories of negligence and breach of warranty, and the jury returned a general verdict in favor of Matthews against both Ford and Kimnach.

Many of the assignments of error pertain to familiar principles of law and to questions which were solely the province of the jury. On these issues, we find extended discussion unnecessary. Examination of the record and consideration of the briefs and oral argument disclose no reversible error in the empaneling and instruction of the jury, the admission and exclusion of evidence, or the denial of motions for judgment. Further, the evidence of negligence amply supports the jury's verdict against both defendants in tort. Cf. Pierce v. Ford Motor Co., 190 F.2d 910 (4th Cir. 1951).

However, because the jury returned a general verdict, Ford and Kimnach argue that error in submitting Matthews' claim of breach of warranty to the jury requires reversal.¹ They rely on clauses in the contract of sale, which they assert are sufficient to disclaim liability. Since no Virginia case applying the sections of the Uniform Commercial Code that pertain to the contractual liability of a manufacturer and a dealer has been called to our attention, we will briefly state the reasons for our affirmance on this issue.²

The purchase order for Matthews' new car contained an express warranty.³ In lieu of implied warranties, Ford warranted the car to be free from defects in material and workmanship for a period of twenty-four months or until it had been driven 24,000 miles, but the only remedy mentioned was replacement of defective parts free of charge. Matthews urges us to hold that Ford's exclusion of the implied warranties of merchantability and fitness is either ineffective or unconscionable under §§ 2-316 or 2-302 of the Uniform Commercial Code.⁴ However, we need not consider this approach to the problem because it is clear that Ford is liable under its express warranty.

The evidence was sufficient for the jury to find that Ford breached its express warranty by selling a car which inadvertently went into reverse gear when a wheel struck the type of slight obstruction that a manufacturer could reasonably expect a buyer to encounter in ordinary travel. Cf. Spruill v. Boyle-Midway, Inc., 308 F.2d 79, 83 (4th Cir. 1952). Therefore, the only remaining question is the effectiveness of Ford's attempt to limit damages by restricting Matthew's remedy to replacement of defective parts. This limitation fails for two reasons. First, Virginia's version of the Uniform Commercial Code strips Ford of the defense of lack of privity.⁵ Secondly, § 2-719(3) of the Code denounces as prima facie unconscionable the limitation of damages for personal injuries that are caused by consumer goods. Since Ford did not rebut this presumption, Matthews was entitled to recover damages for his injuries.⁶

Kimnach Ford's contractual liability rests on a different theory. The district court ruled that Kimnach impliedly warranted the fitness of the car, as provided in § 2-315 of the Code.⁷ Evidence of the car's defects was sufficient to establish breach of this warranty and, therefore, the jury's verdict on this issue is unassailable. Kimnach, however, urges us to hold that although it gave no express warranties, it effectively disclaimed all implied warranties.⁸ We find no merit in this contention.

Clause 10 of the terms and conditions of the purchase order⁹ was not an effective disclaimer. The Code requires that a writing excluding the implied warranty of fitness be "conspicuous."¹⁰ Clause 10, buried in small type among 18 other numbered paragraphs on the back of the purchase order, fails to satisfy the Code's definition of this essential adjective.¹¹ Accordingly, the implied warranty of fitness was not excluded by Clause 10.

The district court, over Kimnach's objection, held that Kimnach could not rely on the disclaimer of implied warranties in Ford's express warranty because this warranty by its terms ran directly from Ford to the customer. In the absence of an effective disclaimer, the court ruled, the implied warranty of fitness provided in § 2-315 applied.¹² We find no error in this ruling. Generally, express warranties and disclaimers do not run with personal property. Therefore, the exclusions contained in a manufacturer's express warranty do not absolve an independent dealer¹³ from liability imposed by an implied warranty. Jolly v. C. E. Blackwell & Co., 122 Wash. 620, 211 P. 748 (1922); cf. Fisher v. City Sales & Serv., 128 So.2d 790, 793 (La.App.1961) (civil law).

Kimnach, however, argues that the general rule of non-assignability of disclaimers does not apply because Ford's disclaimer expressly embraces the dealer. Even if the district court had accepted this argument, Kimnach would be liable. If the disclaimer in Ford's warranty is deemed to exclude Kimnach's implied warranty, the undertaking assumed by Kimnach to fulfill Ford's warranty must also be considered. Its liability, therefore, is coextensive with Ford's, and the attempt to limit its responsibility for damages to the repair or replacement of defective parts is also prima facie unconscionable under § 2-719(3) of the Code.¹⁴ Since Kimnach, too, failed to rebut the presumption, it, no less than Ford, would be liable to Matthews for his personal injuries under this alternative theory.

Although the Virginia Supreme Court held in Marshall v. Murray Oldsmobile Co., 207 Va. 972, 154 S.E.2d 140 (1967), that a disclaimer of implied warranties was not contrary to public policy, Ford's and Kimnach's reliance on the case is unfounded. Murray was a suit for rescission of a contract, not for personal injuries. Moreover, since the transaction occurred before Virginia adopted the Uniform Commercial Code, the statutes which govern the case before us played no role in that decision.

The judgment is

Affirmed.

1 The uncertainty caused by the general verdict is illustrated by the disparate effect of contributory negligence, which in Virginia is a defense to tort liability but not to breach of warranty. Consideration of Matthews' alternative claims probably would be unnecessary had the jury returned separate verdicts on the issues of negligence and breach of warranty, as allowed by Fed.R.Civ.P. 49(a).

2 The Supreme Court of Virginia has indicated that an action for personal injuries caused by breach of warranty should be based on the contract of sale and not on the doctrine of strict liability in tort. Brockett v. Harrell Bros., Inc., 206 Va. 457, 143 S.E.2d 897, 902 (1965); see Speidel, The Virginia "Anti-Privity" Statute: Strict Products Liability under the Uniform Commercial Code, 51 Va.L. Rev. 804, 817 (1965). While the theories of tort and contractual liabilities differ, the result of this case would likely have been the same had the principles of Restatement (Second) of Torts § 402A (1965) been applied. See Chestnut v. Ford Motor Co., 445 F.2d 967, 968 (4th Cir. 1971); cf. Vandermark v. Ford Motor Co., 61 Cal.2d 256, 37 Cal.Rptr. 896, 391 P.2d 168 (1964).

3 The following warranty appeared on the back of the purchase order:

"There is no warranty, express or implied, made by either the Ford Motor Company or the selling Dealer on new Ford vehicles except the following direct Company vehicle warranty:

DIRECT COMPANY VEHICLE WARRANTY

"Ford Motor Company warrants to the owner each part of this Ford vehicle to be free under normal use and service from defects in material and workmanship for a period of 24 months from the date of delivery to the original retail purchaser or until it has been driven for...