Albin Elevator Co. v. Pavlica

Decision Date26 July 1982
Docket NumberNo. 5651,5651
Citation649 P.2d 187
Parties34 UCC Rep.Serv. 438 ALBIN ELEVATOR COMPANY, Appellant (Defendant), v. Mike PAVLICA, Appellee (Plaintiff).
CourtWyoming Supreme Court

Henry F. Bailey, Jr., and Richard F. Pickett, Loomis, Lazear, Wilson & Pickett, Cheyenne, for appellant.

William A. Riner, Cheyenne, for appellee.

Before ROSE, C. J., and RAPER, THOMAS, ROONEY and BROWN, JJ.

ROSE, Chief Justice.

Plaintiff-appellee Pavlica brought suit against defendant-appellant Albin Elevator Company charging negligence and breach of express warranty. 1 In his complaint, Mr Pavlica alleged that Albin Elevator Company had warranted to sell him "spring wheat" but had in fact sold him "winter wheat" which did not produce a crop. As a result, Pavlica prayed that the court award him $9,200 for expenses incurred in attempting to produce a crop, $24,400 in lost profits, and that he be relieved from reimbursing Albin Elevator for the $866 purchase price. Trial was to the court and the plaintiff-appellee was awarded damages in the sum of $10,371 for lost profits and Albin Elevator's counterclaim for the purchase price of the wheat was denied. Mr. Pavlica took no exception to the award, nor has he presented any argument to us except that the trial judge acted properly in awarding him $10,371 for lost profits. He does not, for example, ask for the expenses incurred in purchasing the seed or raising the crop and so we are bound to assume that his expenses are not the subject of this appeal.

In this appeal, the elevator company is challenging the trial court's finding that there had been a breach of an express warranty, and it also challenges the court's award of damages for lost profits. The issues raised by appellant are framed in the following manner:

"1. Whether or not Defendant's express warranty that wheat sold to Plaintiff on May 7, 1980, was 'spring wheat' was tantamount to a warranty that the wheat was also 'spring wheat seed ' and suitable for planting.

"2. Whether or not Plaintiff's proof of damages was so speculative and conjectural that the Court erred in awarding Plaintiff damages for lost profits in the amount of $10,371.00."

We will affirm with respect to the finding that appellant breached an express warranty and reverse the trial court's award of damages for lost profits.

FACTS

Plaintiff-appellee, Mike Pavlica, has operated his farm near Burns since 1974. In May of 1980 he called Albin Elevator Company to inquire if they had some "spring wheat" which he could plant that spring and was informed by a company representative that "spring wheat" was available. On May 7, 1980, Pavlica took delivery of 216.3 bushels of "spring wheat" from Albin Elevator and this transaction was verified by a sales ticket signed by one of Albin's employees, which recited that "spring wheat" had been delivered.

The appellee planted the seeds and within a few weeks approximately 99% of them germinated. Mr. Pavlica continued watering the crop and he sprayed the field with a chemical substance in order to control weed growth. The wheat plants, however, did not produce stalks and remained in a green, leafy state.

The appellee solicited the advice of Dr. Bernard Kolp of the University of Wyoming who traveled to the farm and advised that the plants had characteristics of "winter wheat" rather than "spring wheat." 2 He recommended various procedures which Pavlica could follow which, he suggested, might insure the production of a crop. These recommendations were followed, but a harvestable crop was never produced, although Mr. Pavlica did manage to lease the field for grazing purposes for $600.

On the basis of these facts, appellee brought the present action seeking damages for breach of express warranty.

DID APPELLANT BREACH AN EXPRESS WARRANTY?

As noted previously, § 34-21-230, W.S.1977 (UCC § 2-313), governs claims for express warranties in Wyoming. See: § 34-21-230, supra n.1. A portion of that statute provides that any description of the goods which the parties make a basis of the bargain creates an express warranty, and the goods sold must conform to the description. Section 34-21-230(a)(ii), supra n.1. Also, the statute provides that the seller need not specifically use the words "warrant" or "guarantee" or even intend to expressly warrant in order for the court to determine that a warranty was in fact made. Section 34-21-230(b), supra n.1. Thus, it is necessary to consider whether or not the agreement between the parties evidences any description or promise made by Albin Elevator which became a basis of the bargain. Shepard v. Top Hat Land & Cattle Co., Wyo., 560 P.2d 730 (1977). Secondly, if plaintiff-appellee is able to demonstrate the existence of an express warranty, he must then prove that the warranty was breached and that he was damaged as a result. Kure v. Chevrolet Motor Division, Wyo., 581 P.2d 603, 608 (1978); Colorado Serum Company v. Arp, Wyo., 504 P.2d 801, 805 (1972).

Given the facts surrounding the sale of the wheat seed, we conclude that the trial court acted properly in deciding that Albin Elevator had expressly warranted to Mike Pavlica that he was purchasing "spring wheat." The description is plainly reflected in the sales ticket, signed by one of appellant's employees, where the recitation approves to the effect that Albin delivered 216.3 bushels of "spring wheat" to appellee. According to the testimony, Albin was informed by Pavlica prior to the sale that he desired "spring wheat" for planting purposes. These facts establish that Albin expressly warranted to sell Pavlica "spring wheat" and such assurances were made a basis of the bargain. An express warranty was given by Albin under § 34-21-230(a)(ii), W.S.1977.

It further appears that plaintiff-appellee presented substantial uncontradicted evidence to the effect that the express warranty was breached. At trial, Dr. Kolp, plaintiff-appellee's witness, testified that, in his opinion, the plants he observed on the farm were "winter wheat" sprouts and not "spring wheat." Thus, the evidence reveals that Pavlica thought he was buying and planting "spring wheat" when in fact he was sold "winter wheat" seeds. It was also not disputed that "winter wheat" seeds would not produce a crop at the time plaintiff-appellee planted them. Clearly, Albin did not sell plaintiff what it had warranted to sell. Considering the evidence, Albin's argument that it did not warrant to sell Pavlica "spring wheat seed" but only "spring wheat" requires little discussion. We say this because the facts reflect that Albin delivered "winter wheat" rather than "spring wheat" and that fact in itself was a sufficient basis for the trial court to conclude that Albin had breached the warranty.

DID PLAINTIFF-APPELLEE PROVE HE WAS DAMAGED BY THE BREACH?

In light of our conclusion that there was ample evidence to sustain the finding of a breach of an express warranty, the only question remaining concerns proof of damages.

In cases where a buyer seeks to recover damages for a breach of warranty, § 34-21-293(b), W.S.1977 (UCC § 2-714) instructs:

"(b) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount."

Subsection (c) of § 34-21-293, W.S.1977, also allows the buyer, in a proper case, to recover any consequential and incidental damages. The recovery of incidental and consequential damages for breach of warranty is governed by § 34-21-294, W.S.1977 (UCC § 2-715). That section provides:

"(a) Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach.

"(b) Consequential damages resulting from the seller's breach include:

"(i) Any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and

"(ii) Injury to person or property proximately resulting from any breach of warranty."

In this case, plaintiff-appellee sought recovery for his lost profits which, he argued, resulted as a consequence of the breach.

The trial court ascertained the loss-of-profit figure of $10,371 by assuming a

" * * * gross return of Forty (40) bushels per acre on One Hundred Forty (140) acres, each bushel having a dollar value of Four Dollars ($4.00) for a total of Twenty-Two Thousand Four Hundred Dollars ($22,400.00) from which should be subtracted the following expenses incurred by Plaintiff in connection with the crop: Eight Hundred Sixty-Six Dollars ($866.00) for seed grain, Nine Thousand Twenty-Three Dollars ($9,023.00) for electric power to operate the sprinkler system and water well, land preparation, planting, fertilizing and post emergent herbicide spraying, and One Thousand Five Hundred Forty Dollars ($1,540.00) for harvesting * * * ; The further sum of Six Hundred Dollars ($600.00) should also be deducted as the sum received by Plaintiff for use of the vegetation actually produced as cattle grazing; * * * " (From the judgment of the court.)

The problem that we have with this calculation is the court's finding that the plaintiff-appellee would have produced 40 bushels of wheat per acre.

Although we have never specifically held that lost profits can be recovered for breach of warranty, the general rule is that such profits are a proper element of damages which can be recovered for breach of warranty under the Uniform Commercial Code. White and Summers, Uniform Commercial Code § 10-4, p. 391 (2nd Ed. 1980). See also: White v. Oregon Horticultural Supply, 40...

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