Alberti v. Manufactured Homes, Inc.
| Decision Date | 05 September 1991 |
| Docket Number | No. 371PA89,371PA89 |
| Court | North Carolina Supreme Court |
| Parties | , 15 UCC Rep.Serv.2d 1184 Caley Eugene ALBERTI and Linda Haggins Alberti v. MANUFACTURED HOMES, INC., d/b/a AAA Mobile Homes and Brigadier Homes, Inc. |
On discretionary review of a unanimous decision by the Court of Appeals, 94 N.C.App. 754, 381 S.E.2d 478 (1989), reversing in part and affirming in part judgment entered on 3 March 1988, and vacating an amendment to the judgment entered on 9 June 1988, by Barefoot, J., in Superior Court, New Hanover County. Heard in the Supreme Court 11 April 1990.
Poisson, Barnhill & Britt by James R. Sugg, Jr., Wilmington, for plaintiffs-appellants.
Murchison, Taylor, Kendrick, Gibson & Davenport by Vaiden P. Kendrick and John L. Coble, Wilmington, for defendant-appellee Brigadier Homes, Inc.
Plaintiffs, who are consumers, purchased from defendant retailer a mobile home produced by defendant manufacturer. The floor of the home did not conform to certain representations made about it. We must consider what remedies, if any, are available to plaintiffs under the Uniform Commercial Code against defendant manufacturer, with whom plaintiffs had no direct dealings. We conclude plaintiffs have a remedy for breach of warranty made by the manufacturer, but the remedy of revocation of acceptance against the manufacturer is unavailable.
Evidence at trial tends to show the following:
Plaintiffs were interested in purchasing a mobile home from defendant AAA Mobile Homes, a retailer ("AAA" or "the retailer"). They emphasized to AAA's branch manager Lowell Bockert that they desired plywood flooring because they had previously had trouble with particle board flooring. Bockert assured them that the double wide Caprice model manufactured by defendant Brigadier ("Brigadier" or "the manufacturer") had flooring made of a new material called "Novadeck" which was a waterproof, tongue-and-grooved plywood thicker and stronger than particle board. While Bockert was showing Mr. Alberti the Caprice home, they tried to examine the flooring to ascertain its type but could not get the carpet up without damaging it. Rather than calling in a serviceman to check the floor, plaintiffs trusted Bockert's representations about it. In August 1984, they purchased the Brigadier Caprice home from AAA for $32,600, making a $10,000 down payment and financing the balance of the purchase price through CIT Financial Services. Plaintiffs received a one-year manufacturer's limited warranty covering defects in material and workmanship.
At trial, Bockert claimed to base his representations about the unit's flooring on information given him some time earlier by Brigadier's sales representative Donald Phillips. Phillips allegedly described the Novadeck flooring system during a conference, when he highlighted the attributes of Brigadier merchandise so that AAA could pass along this information to customers and thereby facilitate sales of Brigadier products. Several witnesses corroborated Bockert's testimony that Phillips made these representations to him.
At trial, Phillips admitted having met with Bockert, but denied representing to him that the Caprice's floor was made of Novadeck; that it was stronger or thicker than particle board; or that it was waterproof.
Shortly after occupying their new Brigadier Caprice home in 1984, plaintiffs discovered their hot water heater was leaking. A service representative from Brigadier examined the area and told plaintiffs that the flooring was made out of particle board. Because of water damage to the utility room floor, a washing machine leg fell through. Plaintiffs also claimed to discover over thirty other defects.
After discussing problems about their home several times with agents of the retailer AAA and the manufacturer Brigadier, plaintiffs on 25 April 1985 gave both AAA and Brigadier notice that they were revoking acceptance of the mobile home. They subsequently filed suit, seeking to enforce this revocation and to recover damages for breach of warranty. Plaintiffs later amended their complaint, seeking treble damages for unfair and deceptive acts or practices in or affecting commerce under Chapter 75 of the North Carolina General Statutes.
During trial plaintiffs negotiated a settlement with the retailer AAA and dismissed it from the case. The trial court submitted two issues about Brigadier's liability to the jury:
1. Did the defendant, Brigadier Homes, Inc., represent that the mobile home contained Nova Deck flooring?
ANSWER: Yes
2. Did the plaintiffs give proper notice of revocation of acceptance of the mobile home to the defendant, Brigadier Homes, Inc.?
ANSWER: Yes
The trial court then entered judgment on the verdict. The judgment recited:
Pursuant to the jury verdict set forth above and the stipulations entered into between the parties and the instructions of the judge presiding with regard to the meaning of the two factual issues submitted to the jury:
It is hereby ADJUDGED, ORDERED and DECREED that the plaintiff have and recover of the defendant, Brigadier Homes, Inc., the sum of $12,184.00 (Twelve Thousand One Hundred Eighty-Four Dollars and NO/100) as restitution and that the plaintiff's [sic] were entitled to revoke and did revoke the mobile home purchase contract.
It is further ADJUDGED, ORDERED and DECREED that the plaintiff have and recover of the defendant, Brigadier Homes, Inc., the sum of $1,500.00 (One Thousand Five Hundred Dollars and NO/100) as an award of treble damages for a violation by the defendant, Brigadier Homes, Inc., of N.C.G.S. 75-1.1, in that the defendant falsely represented the flooring in the mobile home sold to the plaintiffs which misrepresentation resulted in damages to plaintiffs in the amount of $500.00 (Five Hundred Dollars and NO/100).
It is further ADJUDGED, ORDERED and DECREED that the plaintiffs have and recover of the defendant, Brigadier Homes, Inc., interest at the rate of 8% (eight percent) from September 1, 1984, the date Plaintiff's [sic] first learned of the breach, until the judgment herein provided is paid.
The amount of damages to be awarded was not submitted to the jury but was determined pursuant to certain stipulations by the parties. The revocation of acceptance award--$12,148.00 "as restitution"--appears to have been computed by the trial court as a return of plaintiffs' payments, offsetting depreciation and fair rental expenses. Regarding the $1500 treble damages award for Brigadier's false representation, the $500 base amount appears to rely at least in part on the estimated cost of repairing the hole in the floor.
On 9 June 1988, the trial court granted in part defendant's motion to amend the judgment by awarding interest only from the date of judgment. It also ordered that plaintiffs return the home to Brigadier on receipt of the payment "in restitution."
Brigadier appealed to the Court of Appeals, which reversed in part, affirmed in part, and vacated the amendment to the judgment. It held that plaintiffs were not entitled to revoke acceptance against Brigadier because the two parties were not in a contractual relationship. The Court of Appeals also concluded there was no breach of warranty issue presented at trial and that plaintiff could not rely on this theory to uphold the entire judgment. The Court of Appeals treated Brigadier's false representations about the nature of the floor as being only a violation of N.C.G.S. § 75-1.1. It affirmed the judgment's award of treble damages for that violation. We granted plaintiffs' petition for discretionary review to consider whether they are entitled to revoke acceptance against defendant manufacturer and whether they are entitled to relief grounded on a breach of warranty by the manufacturer.
Plaintiffs first argue that the Court of Appeals erred in holding they were not entitled to revoke acceptance against defendant Brigadier. Brigadier contends that because it never entered into a contractual relationship with plaintiffs, revocation of acceptance is not an available remedy against it. We agree with Brigadier and affirm the Court of Appeals decision on this issue.
Because the sale of a mobile home is a "transaction in goods," it is subject to Article 2 of North Carolina's version of the Uniform Commercial Code (hereinafter "UCC"). N.C.G.S. § 25-2-102 (1986). We must construe the UCC to determine the rights of the parties.
The primary goal of statutory construction is to arrive at legislative intent. Electric Supply Co. v. Swain Electric Co., 328 N.C. 651, 403 S.E.2d 291 (1991); Hunt v. Reinsurance Facility, 302 N.C. 274, 275 S.E.2d 399 (1981). Legislative intent may be inferred from the nature and purpose of the statute and the consequences which would follow, respectively, from various constructions. In re Kirkman, 302 N.C. 164, 273 S.E.2d 712 (1981); Campbell v. Church, 298 N.C. 476, 259 S.E.2d 558 (1979). Under the doctrine of expressio unius est exclusio alterius, a statute's expression of specific exceptions implies the exclusion of other exceptions. Morrison v. Sears, Roebuck, 319 N.C. 298, 354 S.E.2d 495 (1987).
Bearing in mind these canons of statutory construction, we now turn to Article 2 to determine whether the legislature intended that ultimate consumers be able to revoke their acceptance of goods against remote manufacturers with whom they have no contractual relationship. Article 2 defines acceptance of goods:
(1) Acceptance of goods occurs when the buyer
(a) after a reasonable opportunity to inspect the goods signifies to the seller that the goods are conforming or that he will take or retain them in spite of their non-conformity; or
(b) fails to make an effective rejection ... but such acceptance does not occur until the buyer has had a reasonable opportunity to inspect them; or
(c) does any act inconsistent with the seller's ownership; but if such act is wrongful as against the seller it is...
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