American Federal Bank, F.S.B. v. White, 1206

• Decision Date: 19 April 1988
• Docket Number: No. 1206,1206
• Citation: 370 S.E.2d 923,296 S.C. 165
• Court: South Carolina Court of Appeals
• Parties: AMERICAN FEDERAL BANK, F.S.B., Appellant, v. Ray A. WHITE, Respondent. . Heard

Page 923

370 S.E.2d 923

296 S.C. 165

AMERICAN FEDERAL BANK, F.S.B., Appellant, v. Ray A. WHITE, Respondent.

No. 1206.

Court of Appeals of South Carolina.

Heard April 19, 1988.

Decided Aug. 1, 1988.

Adam Fisher, Jr., and Richard J. Chiariello, of Fisher & Chiariello, Greenville, for appellant.

Richard Vance Davis, of Culbertson, Christian & Moorhead, Greenville, for respondent.

CURETON, Judge:

This is an action for collection of a deficiency judgment and a counterclaim for breach of warranty. Ray A. White purchased a new 1984 truck from Sherwood Chevrolet Inc. on May 19, 1984. The purchase was made pursuant to a retail installment sale contract which was assigned by Sherwood Chevrolet to American Federal Bank, F.S.B. (American). Under the installment sale contract, White made a downpayment of Three Thousand Two Hundred Dollars ($3,200). He also paid Five Hundred Eighty-Eight Dollars ($588) for a vehicle service contract. White was to make forty-eight monthly payments of approximately Three Hundred Twenty-Seven Dollars ($327) each beginning July 3, 1984. White made several payments on the truck. He claimed the truck had certain defects which were not adequately repaired by Sherwood Chevrolet. American repossessed the truck in January 1985 and sold it. American instituted this action against White for a deficiency judgment of Two Thousand Eight Hundred Seventy-One and 28/100 Dollars ($2,871.28). White counterclaimed for breach of warranty. The case was tried before a judge who entered a written order denying judgment to American and entering judgment for White in the amount of Four Thousand Five Hundred Ten and 56/100 Dollars ($4,510.56). This amount represents the sum of the downpayment and monthly payments paid by White. American appeals.

I.

In an action at law tried by a judge without a jury, the jurisdiction of this court extends only to the correction of errors of law and the factual findings of the trial judge will not be disturbed on appeal if there is any evidence to support them. Townes Associates Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976).

The trial judge found White purchased the truck in May 1984. It was undisputed White did not make the November and December 1984 payments nor did he make the January 1985 payment. The truck was repossessed on January 29, 1985, while at Sherwood Chevrolet. At the time of repossession it only had Two Thousand Eight Hundred Eighty-Five (2885) miles on it. The trial judge found the truck was defective on the date of the sale and the seller failed to effectively resolve the defects in the truck. White testified and the court found the transmission failed a few days after purchase and was never properly repaired. Further, the court found the paint on the truck was defective and although White returned the truck to Sherwood on several ocassions and the truck was repainted once the paint problems still persisted. The record indicates the truck sold for Nine Thousand Dollars ($9,000) after repossession.

The retail installment sales contract contains two clauses of particular relevance to this case. The language of the provisions is as follows:

Warranties Seller Disclaims. You understand that the Seller is not offering any warranties and that there are no implied warranties of merchantability, of fitness for a particular purpose, or any other warranties, express or implied by the Seller, covering the vehicle unless the Seller extends a written warranty or service contract within 90 days from the date of this contract.

NOTICE: ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER. (emphasis in original)

White purchased a service contract from Sherwood Chevrolet. The service contract was introduced into evidence at trial, but is not part of the record on appeal. Counsel for White stipulated the service contract did not allow the buyer to stop making payments while the truck was being repaired. White agreed the truck was under the service contract when he stopped making payments. Other than this sparse testimony the appellate record contains little information about the service contract. The trial judge found the seller failed to cure the defects in the truck and this failure to cure breached the express warranty and service contract.

II.

American argues a prior court order limits the counterclaim of White to breach of implied warranty of fitness for a particular purpose. We do not agree. American filed a motion for summary judgment. In the order disposing of the motion, the court struck one defense asserted by White but determined issues of fact remained on the other defense. The court held "there still remains a material question of fact as to whether or not the [p]laintiff, as assignee to the seller's contract, breached an implied warranty of fitness as alleged in the [d]efendant's third defense by way of counterclaim." The appellate record contains no excerpts from the summary judgment hearing. The counterclaim does not plead breach of implied warranty of fitness for a particular purpose. The pleading states the "[p]laintiff had breached the warranty given to the [d]efendant that the truck was in good condition." There are no allegations White desired to purchase a truck for a particular purpose or that he relied upon the seller's skill and judgment to furnish appropriate goods. There is a distinction between the concepts of implied warranty of merchantability and implied warranty of fitness for a particular purpose. See S.C. Code Ann. Sections 36-2-314 and 36-2-315 (1976). The use of imprecise language in the summary judgment order was unfortunate but we find no basis in this record to support American's contention the summary judgment order limited White's counterclaim to a cause of action not plead by him.

III.

American argues the trial court erred in finding a breach of the service contract. First, American argues error because the prior summary judgment order limited the counterclaim. We have disposed of this argument in Part II of this opinion. American additionally asserts the written service contract was not breached. ¹ American claims the service contract contained a repair provision and whenever White took the truck to Sherwood Chevrolet efforts were made to repair the defects. We previously noted the service contract is not in the record. We have no way to review its terms because the testimony offers no explanation of the respective rights and duties of the parties. In any event, we do not agree with American's general proposition that because the seller repeatedly tries to repair means the seller has fully complied with a service contract. Although a seller may limit the buyer's remedies to repair and replacement of nonconforming goods or parts, the exclusive or limited remedy may fail of its essential purpose. Section 36-2-719, Code of Laws of South Carolina, 1976; Waters v. Massey-Ferguson, Inc....