Chestnut Forks Tennis Club v. T.J. Intern., Inc.
| Decision Date | 31 May 1995 |
| Docket Number | No. 94-1315,94-1315 |
| Citation | 56 F.3d 60 |
| Parties | NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit. CHESTNUT FORKS TENNIS CLUB, Plaintiff-Appellant, v. T.J. INTERNATIONAL, INCORPORATED; Trus Joist MacMillan, Limited, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Before HALL and WILKINSON, Circuit Judges, and CHAPMAN, Senior Circuit Judge.
Chestnut Forks Tennis Club appeals an order granting summary judgment to defendants T.J. International, Inc., and Trus Joist MacMillan, Ltd., 1 in Chestnut Forks' action for breach of an express warranty of future performance of wooden roof trusses installed at an indoor tennis complex. Because we conclude that summary judgment was inappropriate, we reverse and remand for trial.
Chestnut Forks Tennis Club is an indoor tennis complex in Warrenton, Virginia. It was constructed in 1974-1975, with a roof truss system manufactured by defendant Trus Joist. Chestnut Forks is a Virginia partnership; John Maloney is its general partner.
The trusses were made of yellow pine and, at the instance of Chestnut Forks' insurers, were treated with a fire retardant by Koppers Company, Inc. (now Beazer East, Inc.). This retardant caused the pine to crack and weaken much sooner than anyone expected. In 1992, Trus Joist, having apparently discovered the retardant's deteriorating effects elsewhere, sent engineers to Chestnut Forks to inspect the truss system. The engineers found that the system was dangerously weakened, and Chestnut Forks spent over $400,000 to replace it. Trus Joist refused to pay for the replacement.
On July 26, 1993, Chestnut Forks filed suit in district court against Trus Joist and Beazer East, Inc. Jurisdiction rested on diversity of citizenship. It pled several claims--breach of various express and implied warranties and negligent design and manufacture. The defendants moved to dismiss based on Virginia's statute of limitations. Va.Code Sec. 8.2-725(1). The district court granted the motion, but gave Chestnut Forks fifteen days to file an amended complaint.
The amended complaint, filed October 4, 1993, asserted a single claim against Trus Joist--breach of an express warranty of future performance. 2 After hearing argument, the district court granted summary judgment for the defendants. The court held that no such warranty had been given as a matter of law. Chestnut Forks appeals.
The original written contract for the sale and installation of the truss system was executed on June 20, 1974. It is a simple two-page form, with specifics on the front and general terms and conditions on the back of a single sheet of paper. It was prepared and furnished by Trus Joist. This contract called for 78 trusses at a cost of $48,571. Maloney alleges that he called Trus Joist headquarters before executing this contract and spoke with someone whose name he can no longer remember. The representative told him that the wood truss system would last as long as a metal system.
Chestnut Forks then learned that it could get a lower fire insurance rate if the wood in the trusses were treated with a fire retardant. It requested Trus Joist to add such treatment to the contract, and, on July 12, 1974, a new agreement was signed on the same form as the first. This one called for 78 treated trusses at a cost of $61,350.
At Trus Joist's instance, a third superseding contract was signed on September 4, 1974. This one added a 79th truss and increased the cost to $62,137. Before signing, Maloney called Trus Joist and again spoke to someone whose name he does not remember. He was told that the extra beam was needed to compensate for the fire retardant. This revelation prompted concern from Maloney, but the representative assured him that the truss system would be as strong as metal and would last a lifetime.
The agreement contained express warranties that the truss system would be free of errors in design or workmanship, and Virginia law would imply others. All of these warranties have, however, long since expired. See footnote 2 supra. The agreement also contained boiler-plate clauses declaring that the contract was complete in itself, there were no parol terms, and no subsequent modifications were valid unless made in writing and signed by Trus Joist.
Chestnut Forks was hoping to have its grand opening before Christmas, 1974, but the trusses were two weeks late in arriving at the construction site. Work began on a Friday in early November. Over the weekend, the partially completed system collapsed, causing damage to already-constructed walls. Eight joists were also damaged.
This accident and the resulting damage were arguably a breach of contract, and Maloney was angry enough to threaten to deny Trus Joist an opportunity to cure. After several meetings, it was agreed that Trus Joist would furnish the eight replacement joists needed and credit $26,484 (approximately 40%) toward the contract price to defray the damages caused to Chestnut Forks by the delay in shipment and the accident. A letter, dated December 12, 1974, from Trus Joist to Maloney reflected this agreement. The letter stated that replacement parts would "carry the full Trus Joist warranty." 3 According to Maloney, there was a bit more to the deal than the letter reflects. He testified that he was very upset after the collapse of the partially completed structure, that he was ready to walk away from the deal, and that he threatened to do so. He alleges that William Walters, Trus Joist's National Manufacturing Manager, again assured him that the completed structure would be as strong as steel. Relying on these assurances, Maloney says that he accepted the offered $26,484 credit. From there, construction went smoothly, and the club was opened in April. Nothing of consequence occurred thereafter until the visit of Trus Joist's engineers in 1992.
A threshold issue is whether the statements allegedly made by the unidentified Trus Joist employees and then by Walters constitute express warranties. The Virginia version of the Uniform Commercial Code states: "any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to that description." Va.Code Sec. 8.2-313(1)(b). The seller may create a warranty without having the specific intent to do so, and he need not use words like "warrant" or "guarantee," but "an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty." Va.Code Sec. 8.2-313(2).
There is certainly some tension between the idea that a "description" of the goods creates a warranty but an "opinion" about or "commendation" of them does not. In Virginia, the onus is on the seller to avoid making a warranty:
[I]f one who has superior knowledge makes a statement about the goods sold and does not qualify the statement as his opinion, the statement will be treated as a statement of fact.
Daughtrey v. Ashe, 243 Va. 73, 413 S.E.2d 336, 338 (1992).
The Daughtrey rule squarely resolves this issue. Maloney testified that he was told that the wood truss system would last 80 to 100 years. Because the alleged statements were not qualified as mere opinions, they can constitute "warranties" if they were the basis of the bargain.
To decide whether the alleged representations formed the basis of the bargain, we must divide them into two groups: (i) statements by unidentified (and now probably unidentifiable) Trus Joist employees made before the September 4 contract, and (ii) Walters' statements to Maloney in connection with the December 12 resolution of Trus Joist's breach of contract.
The September 4 contract contains a merger clause and "no oral modifications" clause:
9. Seller and Purchaser mutually agree that the written and printed provisions hereto embody all of the parties' agreements, conditions, and representations; and no oral or written agreements, between the parties or their agents not herein contained shall be of any effect. Subsequent modifications must be in writing and accepted by Seller.
In Virginia as elsewhere, evidence of a prior or contemporaneous parol agreement may not be relied upon to contradict the provisions of a written contract. Va.Code Sec. 8.2-202; Walker & Laberge Co. v. First Nat'l Bank of Boston, 206 Va. 683, 146 S.E.2d 239, 243 (1966). However, evidence of additional, consistent terms may be offered, so long as the written contract is not intended to be a "complete and exclusive statement of the terms of the agreement." Va.Code Sec. 8.2-202(b); Shockey v. Westcott, 189 Va. 381, 53 S.E.2d 17, 20 (1949). This exception cannot apply to the assurances allegedly made by Trus Joist employees before execution of the September 4 written contract, because that writing specifies that it contains all of the parties' "agreements, conditions, and representations." The pre-contract oral assurances are therefore unenforceable. Hoover Universal, Inc. v. Brockway Imco, Inc., 809 F.2d 1039, 1043 (...
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