718 F.2d 88 (3rd Cir. 1983), 82-3341, Gumbs v. International Harvester, Inc.

Docket Nº:82-3341.
Citation:718 F.2d 88
Party Name:Kenneth GUMBS and Yvonne Gumbs, Appellees, v. INTERNATIONAL HARVESTER, INC., Appellant.
Case Date:September 30, 1983
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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718 F.2d 88 (3rd Cir. 1983)

Kenneth GUMBS and Yvonne Gumbs, Appellees,

v.

INTERNATIONAL HARVESTER, INC., Appellant.

No. 82-3341.

United States Court of Appeals, Third Circuit

September 30, 1983

Argued April 25, 1983.

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[Copyrighted Material Omitted]

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Richard H. Hunter (argued), Isherwood Hunter & Colianni, Christiansted, St. Croix, U.S.V.I., for appellant.

Desmond L. Maynard, St. Thomas, V.I., for appellees.

Before GIBBONS, SLOVITER and BECKER, Circuit Judges.

OPINION

BECKER, Circuit Judge.

This appeal in a Virgin Islands products liability case requires us to determine the quantum of evidence necessary to make out a case of breach of implied warranty of fitness for a particular purpose under U.C.C. Sec. 2-315, V.I.Code Ann. tit. 11A, Sec. 2-315 (1965). Because under this cause of action a buyer must prove that he actually relied on the seller's skill or judgment in selecting the goods in question, and because at trial the plaintiff presented no such evidence, we must set aside a verdict grounded on section 2-315. The appeal also requires us to explore the relationship between the elements of liability under Restatement (Second) of Torts Sec. 402A (strict products liability) and section 2-314 of the Uniform Commercial Code, V.I.Code Ann. tit. 11A, Sec. 2-314 (1965) (breach of seller's implied warranty of merchantability). Because we conclude that the requisites for liability under sections 402A and 2-314 are, under the facts of this case, coextensive, we therefore set aside as irreconcilably inconsistent, the jury's findings that a truck chassis manufactured and sold by defendant, International Harvester ("Harvester") was not defective and unreasonably dangerous, but that the sale breached Harvester's implied warranty of merchantability. To provide guidance for the district court on retrial, we also consider a number of evidentiary issues presented by the record.

I. Facts and Procedural History

Plaintiff Kenneth Gumbs, a truck driver, was employed by Tri-Island Enterprises, Inc. of St. Thomas to deliver water on the island of St. Thomas in an International Harvester Series 1800 truck on which was mounted a tank capable of holding 2700 gallons of water. On February 9, 1978, at about 4:00 a.m., plaintiff was driving the truck loaded to a gross weight of 33,000 pounds. He came to Cassi Hill (a 10% grade), shifted down into gear at the top of the hill, and began his descent. Plaintiff testified at trial that he heard a clanging sound, and that the truck began to gain speed. He applied the brakes to no avail and could not control the steering. At the first turn, a switchback, the truck hit the guardrail, went off the road, and rolled 325 feet to the bottom of a ravine, destroying the truck and injuring plaintiff's back.

Harry Howe, president of Tri-Island Enterprises, had purchased the series 1800 truck from International Harvester of Puerto Rico, Inc., after visiting the Harvester

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sales office in Chicago to discuss modifications to the vehicle. 1 Howe purchased this truck to replace an older International Harvester truck that had also been used to transport water. International Harvester of Puerto Rico removed the water tank from the older truck and installed it on the new truck.

Plaintiff sued Harvester in the District Court for the District of the Virgin Islands. He alleged that the accident was due to a defective U-bolt in the right rear axle of the Harvester truck that broke and caused him to lose control of the vehicle. 2 In the complaint, plaintiff predicated his claim on common-law negligence, strict liability (Sec. 402A), and breach of an implied warranty of merchantability (U.C.C. Sec. 2-314). During the course of the trial, the Court dismissed the negligence claim, but accepted the plaintiff's contention that the jury should be instructed that he could also recover under a theory of implied warranty of fitness for a particular purpose (U.C.C. Sec. 2-315).

The case was submitted to the jury on special interrogatories. The court submitted an interrogatory on section 402A and another on implied warranty of merchantability:

1. Do you find that defendant INTERNATIONAL HARVESTER, INC., being in the business of manufacturing and selling series 1800 Loadstar trucks, manufactured and sold the truck in question in this case in a defective condition, unreasonably dangerous to users or consumers thereof, and that the said truck was expected to and did reach the ultimate consumer (in this case Tri-Island Enterprises Inc. and its employee KENNETH GUMBS) without substantial change in the condition in which defendant manufactured and sold the said truck?

....

3. Do you find that the defendant INTERNATIONAL HARVESTER, INC. breached it's [sic] implied warranty of merchantability?

Special Interrogatories Submitted to the Jury, at 1 (capitalization in the original). The court additionally instructed the jury that interrogatory number three could also be answered in the affirmative if the jury found that Harvester breached an implied warranty of fitness for a particular purpose:

The question No. 3 goes to the cause about implied breach of warranty. The implied breach of warranty of merchantability or the implied breach of warranty for a particular purpose or both, and that question asks: Do you find the defendant International Harvester, Inc. breached its implied warranty of merchantability. Again, you answer yes or no.

Transcript, May 15, 1982, at 47.

The jury found no liability on the section 402A strict liability theory, but answered affirmatively to the third interrogatory, which, by virtue of the jury charge, encompassed both breach of implied warranty of merchantability and implied warranty of fitness for a particular purpose. Having found that a breach of warranty--under either section 2-314 or 2-315--caused the accident and plaintiff's injuries, the jury

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awarded the plaintiff $268,569.00. It reduced this amount by 20% for comparative fault, however. 3

Harvester moved for judgment notwithstanding the verdict or, in the alternative, for a new trial. The district court denied that motion by memorandum order entered June 11, 1982. Harvester appeals and advances two principal arguments. First, Harvester asserts there was no evidence upon which the jury could have based a finding of breach of warranty of fitness for a particular purpose. Second, noting that the jury's affirmative answer to the breach of warranty interrogatory must therefore rest on a breach of an implied warranty of merchantability, Harvester argues that the elements of the breach of implied warranty of merchantability and strict liability actions are identical, and therefore that the verdicts must be set aside as inconsistent.

II. Implied Warranty of Fitness for a Particular Purpose

Section 2-315 of the Uniform Commercial Code, codified at V.I.Code Ann. tit. 11A, Sec. 2-315, creates a cause of action for breach of implied warranty of fitness for a particular purpose. The section provides:

Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is unless excluded or modified under the next section an implied warranty that the goods shall be fit for such purpose.

If a plaintiff is to recover on the implied warranty of fitness for a particular purpose, he must establish the existence of three conditions:

(1) The seller must have reason to know the buyer's particular purpose.

(2) The seller must have reason to know that the buyer is relying on the seller's skill or judgment to furnish appropriate goods.

(3) The buyer must, in fact, rely upon the seller's skill or judgment.

J. White & R. Summers, Handbook of the Law under the Uniform Commercial Code at 358 (2d ed. 1980). 4

The evidence showed that, prior to the purchase in question, Mr. Howe, the plaintiff's employer, had dealt with Harvester for 11 years and had purchased nine Harvester trucks during that period. Before ordering the truck in question, Howe went to Harvester's Chicago sales office to inquire about new modifications that might be available that would be an improvement over the previous model. Howe considered the possibility of an automatic transmission and a different type of ignition but decided they would not be improvements. Instead, Howe made certain specifications of his own. To compensate for the extra twisting and jarring on St. Thomas roads, Howe asked Harvester to add two leaves to the front suspension spring. Harvester complied with Howe's request. The record does

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not reveal that Harvester supplied any recommendations of its own as to the suitability of the series 1800 truck for hauling water in St. Thomas.

On appeal, Harvester asserts that plaintiff did not adduce any evidence of Howe's actual reliance on Harvester's skill or judgment and thus failed to prove the existence of a warranty of fitness for a particular purpose. Plaintiff's rejoinder--indeed his whole position on the matter, both in his brief...

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