Westric Battery Co. v. Standard Electric Co., Inc.
| Decision Date | 06 July 1973 |
| Docket Number | No. 72-1734.,72-1734. |
| Citation | 482 F.2d 1307 |
| Parties | WESTRIC BATTERY COMPANY, a Colorado corporation, Plaintiff-Appellee, v. STANDARD ELECTRIC COMPANY, INC., a Texas corporation, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
COPYRIGHT MATERIAL OMITTED
Kenneth C. Groves, Denver, Colo., for plaintiff-appellee.
Reed L. Winbourn, of Zarlengo, Mott & Zarlengo, Denver, Colo. (Theo. F. Weiss, of Clemens, Weiss, Spencer & Welmaker, San Antonio, Tex., on the brief), for defendant-appellant.
Before SETH, Circuit Judge, LARAMORE,* Senior Judge, Court of Claims, and DOYLE, Circuit Judge.
This is a products liability case in which the plaintiff Westric Battery Company recovered a judgment based on a jury award in the amount of $472,067.28 from Standard Electric Company, Inc. Liability theories employed at the trial were breach of warranty (express and implied), negligence and strict liability. In seeking reversal the appellant stresses the proposition that strict liability was not applicable since the case was not a personal injury one but, rather, was one in which the plaintiff's losses were strictly property or business losses resulting from out-of-pocket expenditures, loss of profits and injury to business. It also claimed that the verdict is excessive, and it is further contended that the various damage elements resulted in doubling damages. There are numerous alleged errors, but they generally revolve around the contentions just mentioned.
Westric has been for many years in the automotive and truck battery manufacturing and sales business. One aspect of its business since 1960 has been the furnishing of batteries for golf carts. These were sold to golf and country clubs. The evidence shows that Westric's golf cart battery business has been more productive than the remainder of its business. There is some dispute as to whether the business consistently suffered losses during all the times here in question from the automotive and truck battery business. Standard says it did and that it was bound to ultimately fail. Standard also disputes whether there was any remarkable success in the golf cart battery part of the business. However, the record would indicate that it showed some profit at least until the problem in question commenced.
The relationship between Standard and Westric started in 1960 when the latter commenced purchasing so-called battery separators from Standard. Defendant Standard manufactured its own automotive, truck and golf cart batteries under the trade name of "Reliable" and supplied separators for these under the trade name of "Permalife." About 1957, Westric decided to begin manufacturing golf cart batteries. The president of Westric, Lee Hill, visited the Standard plant in Texas. He was given certain samples of Permalife separators, as well as certain technical brochures, pamphlets and catalogs. He testified that Standard personnel specifically told him that the Permalife separator would be satisfactory for Westric's proposed golf cart batteries.1
In late 1960, Westric began manufacturing golf cart batteries utilizing Permalife separators. By 1964 Westric was using Permalife separators exclusively in its golf cart, automotive and truck batteries. From 1960 through about 1966, these batteries performed remarkably; only about one-half of one percent were returned by customers as defective. Westric guaranteed the batteries for full refund or replacement up to ninety days from installation and made an adjustment, by way of credit, for up to two years.
In January of 1967, Standard changed, without notifying Westric, the chemical used as its wetting agent and furthermore removed about twenty percent of the material used in its separator. Thereafter, Westric began to experience a marked increase in battery failures. During the spring of 1968 the return rate reached one hundred percent. Westric sought to discover the cause of these failures, but Standard denied, when questioned by Westric, that its product had been changed or could be responsible for the failures. However, tests conducted by Westric convinced it that the separators were responsible, and so in August of 1968 Westric discontinued purchasing Permalife separators and switched to another brand.
The purpose of the separator is to avoid contact between the positive and the negative plates in the battery, for if they are not kept separated a short circuit will develop and the plates will fail. Battery plates, positive and negative, are initially made up of lead oxide which undergoes chemical change when sulfuric acid is introduced. In the positive plate the lead oxide becomes lead dioxide. In the negative plate the lead oxide becomes lead. As noted, the separator prevents the positive and negative plates from coming together, whereby a short would be produced. At the same time, the electricity must be transmitted through the separator and for this purpose the separators have a large number of small holes which allow the current to flow through. Also, the separators are coated with a special wetting agent which allows the separator to absorb acid much faster and thus permit the current, which flows by means of the acid, to flow more rapidly.
Plaintiff's evidence from numerous experts, while not entirely consistent, tended to advance the theory that the separators which produced the problem had an excessive number of pinholes together with an unstable wetting agent and that this resulted in contaminating the batteries and causing the positive plate to go soft and fail. Standard, on the other hand, maintained that the fault was in the manufacture and that it derived from allowing the batteries to run down too far which, in turn, damaged the positive plate so that there could never be a full recharge. In any event, the jury obviously found that the separators were defective and there was evidence to support this, and so we need not struggle with the intricacies of chemistry here present. Standard argued their factual theories to the jury, but the jury did not accept them. These we cannot consider. The questions which we are to determine are those legal questions which we have summarized.
The trial court instructed the jury on what it considered three different theories, namely, negligence, strict liability of the manufacturer and breach of express and implied warranties.
A. On negligence, the instruction was that if the defendant failed to exercise reasonable care in the manufacture of its product and that this negligence was the proximate cause of the plaintiff's suffering damage, that the plaintiff was entitled to recover. The specification was failure to make any tests and inspections of the separators before placing them on the market.
B. In the express warranty instruction the jury was instructed that in the buyer and seller relationship, if the seller makes an affirmation of fact or promise orally or in writing relating to the goods, which is a basis for the sale, it creates an express warranty that the goods will conform to the affirmation or promise. A description of the goods which is part of the basis for the sale creates an express warranty that the goods shall conform to the description.
The jury was told that in order for the plaintiff to recover, the jury would have to believe that the defendant expressly warranted either the quality of the product or the testing or inspection thereof; if the jury found that the separators were not as warranted, whereby the plaintiff suffered damages, he would be entitled to recover.
C. The subject of implied warranty had two aspects; the court first instructed the jury as to the implied warranty that the goods were merchantable. This the court said is implied from the sale. Merchantable was defined as that which would pass without objection in the trade or industry and that it is fit for the ordinary purposes for which it is used.
The second part of the charge considered implied warranty and said that goods are fit or suitable for a particular purpose if the seller at the time he makes the contract of sale has reason to know of any particular purpose for which the goods are required and knows also that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods for that purpose and if the buyer does rely on such skill or judgment.
D. Finally, the court submitted the theory of strict liability to the jury. This was defined as applying to a situation in which the seller makes to the public a misrepresentation of the material facts concerning the character or quality of the product sold by him. The court further stated that if the buyer justifiably relies on the statement, he may recover damages suffered if the representation was not true and if it resulted in an injury to the buyer. Thus, "strict liability" was described as a species of commerical misrepresentation.
On the question of damages, the jury was told that it could assess actual damages consisting of out-of-pocket losses incurred in the replacement, refund or adjustment to customers for batteries, the actual cost of the separators during the period in question, the impairment of capital directly flowing from these losses and, in addition, the loss of net profit that the plaintiff could reasonably have earned because of the negligence or breach of warranty or misrepresentations on the part of the defendant. Loss of future profits was also allowed so far as they were natural and probable consequences of the wrongdoing, that is, negligence or breach of warranty or misrepresentation.
Appellant Standard advances numerous contentions (approximately 37). We do not deem it necessary to consider the vast majority of these. The determinative questions, that...
To continue reading
Request your trial
-
Telex Corp. v. International Business Machines Corp., 72-C-18
...that other factors may have also contributed. As Judge Doyle aptly stated for the court in Westric Battery Company v. Standard Electric Co., 482 F.2d 1307 (10th Cir. 1973), an injured party ". . . is entitled to be compensated for losses attributable to the injury inflicted, but is not enti......
-
Palmer v. A.H. Robins Co., Inc., 81SA149
...warranties may coexist when there is sufficient evidence to support the creation of each warranty. See Westric Battery Co. v. Standard Electric Co., Inc., 482 F.2d 1307 (10th Cir.1973) (under the Uniform Commercial Code adopted in Colorado, the giving of instructions on implied warranties o......
-
In re Hardieplank Fiber Cement Siding Litig., Case No. 12–md–2359
...Statements made in advertising or technical manuals can create express warranties. See Westric Battery Co. v. Standard Elec. Co., 482 F.2d 1307, 1314 (10th Cir. 1973). Hernandez bases his breach of the informal express warranty claim on the allegation Greve told him that Hardieplank was a l......
-
Blueflame Gas, Inc. v. Van Hoose, s. 82SC52
...under § 402A is not dissimilar to a claim for breach of warranty under the Uniform Commercial Code. See Westric Battery Co. v. Standard Electric Co., Inc., 482 F.2d 1307 (10th Cir.1973). In Prutch v. Ford Motor Co., 618 P.2d 657 (Colo.1980), we considered the nature of a plaintiff's burden ......