Kelleher v. Marvin Lumber & Cedar Co.

• Decision Date: 15 December 2005
• Docket Number: Nos. 2002–300,2003–376.,s. 2002–300
• Court: New Hampshire Supreme Court
• Parties: John J. KELLEHER, Jr. v. MARVIN LUMBER AND CEDAR COMPANY.

152 N.H. 813

891 A.2d 477

John J. KELLEHER, Jr.

v.MARVIN LUMBER AND CEDAR COMPANY.

Nos. 2002–300

2003–376.

Supreme Court of New Hampshire.

Argued: Sept. 14, 2005.

Opinion Issued: Dec. 15, 2005.

Rehearing Denied Jan. 25, 2006.

Sulloway & Hollis, P.L.L.C., of Concord (John R. Harrington, on the brief and orally), for the plaintiff.

Orr & Reno, P.A., of Concord (Emily Gray Rice, on the brief and orally), for the defendant.

GALWAY, J.

In these consolidated appeals, the defendant, Marvin Lumber and Cedar Company (Marvin), appeals: (1) the partial jury verdict from the Superior Court (Brennan, J.) in the first trial that awarded the plaintiff, John J. Kelleher, Jr., $53,676.00 in damages on his strict liability claim; (2) the jury verdict in the retrial that awarded the plaintiff $57,247.04 on his breach of express warranty and breach of the Magnuson–Moss Warranty–Federal Trade Commission Improvement Act (Magnuson–Moss Act) claims; and (3) the award of attorney's fees, at the conclusion of the retrial, in the amount of $119,898.57. The plaintiff cross-appeals the trial court's dismissal of his breach of implied warranty claim under the Act. We affirm in part, vacate in part, and remand.

The record supports the following facts and procedural history. In 1986, the plaintiff purchased and installed windows manufactured by the defendant in his newly constructed residence in Ogunquit, Maine. The plaintiff purchased the windows from John Collins, a salesman employed by Steenbeke & Son, a New Hampshire retail building materials supplier. The windows were treated with a wood preservative (PILT), which was manufactured by PPG Industries and designed to inhibit "premature, moisture-induced wood rot." Before trial, the defendant conceded that PILT is an ineffective preservative.

In 1986, the plaintiff noticed a leak in one of his living room windows. As a result of that leak, and upon the recommendation of a Marvin windows distributor, all of the newly installed windows were re-caulked. In 1993 or 1994, the plaintiff noticed that a small piece of molding on the sash of a rear window contained rot, and he had it repaired. Sometime in 1997, the plaintiff noticed that the sash of the same rear window also contained rot and the sash was replaced. Then, in 1998, the plaintiff employed a painter who found significant amounts of rot in five Marvin windows. Shortly thereafter, in August 1998, the plaintiff filed a complaint form with the defendant, thereby formally notifying it of the rot damage in his windows.

In response to a question on the complaint form, the plaintiff indicated that the rot problem began in "1993/'94?"

After receiving the plaintiff's complaint, a Marvin representative inspected all of the windows in the plaintiff's home and determined that seventeen windows contained rot damage. The inspector showed the plaintiff that a subtle dimpling of the surface coating of the windows was a sign that the underlying wood was rotten. On November 12, 1999, after negotiations to replace the damaged windows were unsuccessful, the plaintiff initiated the underlying lawsuit seeking damages for the replacement costs of the defective windows, loss of value of the house in which the windows were installed and costs related to repairing water damage allegedly caused by the defective windows.

During the course of this litigation, the defendant produced a one-year limited warranty (the one-year warranty), which was in effect in 1986 and allegedly accompanied the windows that were delivered to the plaintiff. This one-year warranty guaranteed the wood portion of the windows. The plaintiff alleged that an oral fifteen-year warranty was given by a Steenbeke salesman during a telephone conversation in 1998, in which the salesman represented that the windows were "guaranteed for a period of fifteen years" (the fifteen-year warranty). In addition, the defendant's catalog, which was generally available from Steenbeke when the plaintiff purchased the windows, stated that: (1) "all exterior wood is deep treated in a dry vac process with a pesticide and water repellant solution to permanently protect against rot and decay"; and (2) the pre-finish "lasts four to five times longer than paint" (the catalog warranty).

The plaintiff's writ asserted claims based upon the fifteen-year warranty but failed to identify the alleged warranty contained in the defendant's catalog. On June 23, 2000, based upon the fifteen-year warranty, the defendant moved to dismiss all of the plaintiff's claims, asserting they were barred by the applicable statutes of limitations and the economic loss doctrine. Specifically, with respect to the Magnuson–Moss and breach of express warranty claims, Marvin argued that the fifteen-year warranty was insufficient to trigger the future performance exception to the applicable statute of limitations, and, therefore, these claims were untimely. See RSA 382–A:2–725(1) (1994). Based upon the fifteen-year warranty, the Superior Court (Groff , J.) denied the defendant's motion to dismiss the breach of express warranty claim, but dismissed the Magnuson–Moss claim because the fifteen-year warranty did not comply with the Magnuson–Moss Act's requirement that it be in writing. The strict liability claim also survived the motion to dismiss.

By order dated September 19, 2000, the trial court granted the plaintiff's motion to amend the writ, which ultimately resulted in both the Magnuson–Moss and breach of express warranty claims being based upon the written catalog warranty rather than the fifteen-year warranty. The defendant then moved for summary judgment, reasserting that the plaintiff's claims were untimely and, therefore, barred as a matter of law. With respect to the strict liability claim, the defendant asserted that the plaintiff knew that one of the windows contained rot as early as 1996, and, therefore, even if the discovery rule exception to RSA 508:4, I (1997) applied, the plaintiff still failed to timely file this claim. Similarly, it argued that pursuant to RSA 382–A:2–725, the statute of limitations applicable to the Magnuson–Moss and breach of express warranty claims, the plaintiff was required to file his claim within four years of delivery of the windows. The defendant also argued that the catalog warranty was not sufficiently explicit to invoke the future performance exception and, therefore, failed to trigger the discovery rule exception encompassed by RSA 382–A:2–725. On April 5, 2001, the trial court denied the defendant's summary judgment motion.

In October 2001, the court conducted a six-day jury trial. By way of a special verdict form, the jury returned a partial verdict for the plaintiff on the strict liability count, awarding damages in the amount of $53,676.00. However, the court declared a mistrial as to the Magnuson–Moss and breach of express warranty claims when the jury was unable to reach a verdict on them. The defendant's subsequent post-trial motion to set aside the verdict, motion for a new trial, motion to reduce damages, and motions for a directed verdict and judgment notwithstanding the verdict (JNOV) were denied.

The defendant appealed the jury verdict, arguing the trial court erred in: (1) determining the plaintiff's claims were timely and did not violate the applicable statute of limitations; (2) declining to determine that the catalog warranty was insufficient, as a matter of law, to trigger the future performance exception of RSA 382–A:2–725 ; (3) allowing the plaintiff to simultaneously maintain both the strict liability claim and the Magnuson–Moss claim; (4) denying its motion to set aside the verdict on the strict liability claim; (5) denying its motion in limine

and admitting statements made by Marvin's agents in connection with another case as statements of a party opponent; (6) failing to properly instruct the jury regarding damages on the strict liability claim; (7) failing to determine that the damages sought by the plaintiff in strict liability were barred by the economic loss doctrine; (8) denying the defendant's motion to reduce damages on the strict liability claim; and (9) denying its motion to dismiss the Magnuson–Moss claim on the basis that the catalog warranty failed to qualify as a written warranty for the purposes of the Magnuson–Moss Act.

While this appeal was pending and over the defendant's objection, the trial court scheduled a retrial of the breach of express warranty and Magnuson–Moss claims. We suspended the pending appeal to allow the trial court to resolve the defendant's remaining claims. Accordingly, in February 2003, the trial court conducted a three-day trial on the remaining claims.

Prior to the February 2003 trial, and contrary to its ruling in the prior trial, the trial court granted the plaintiff's motion to exclude evidence of the one-year warranty at trial. Additionally, prior to charging the jury, the trial court partially granted the plaintiff's motion for a directed verdict, ruling that the representations made in the catalog constituted a written warranty as a matter of law. The trial court then instructed the jury regarding the catalog warranty, the burden of proof, the elements of the claims, damages, and the statute of limitations. The jury returned a plaintiff's verdict in the amount of $57,247.04. The court then granted the plaintiff's motion for attorney's fees, pursuant to the Magnuson–Moss Act, in the amount of $119,898.57. Both parties timely appealed.

On appeal, in addition to incorporating previously asserted arguments, the defendant argues that the trial court: (1) erred in refusing to delay the retrial of the plaintiff's breach of warranty claims; (2) improperly excluded evidence of the one-year warranty; (3) improperly determined, as a matter of law, that the defendant's catalog was a warranty; (4) improperly instructed the jury regarding the appropriate burden of proof, the elements of and damages available under the breach of warranty and Magnuson–Moss Act...