Ayden Tractors, Inc. v. Gaskins, MASSEY-FERGUSO
| Decision Date | 19 April 1983 |
| Docket Number | INC,No. 823SC397,MASSEY-FERGUSO,823SC397 |
| Citation | 61 N.C.App. 654,301 S.E.2d 523 |
| Court | North Carolina Court of Appeals |
| Parties | AYDEN TRACTORS, INC. v. Beverly GASKINS and Artis Gaskins v. |
Everett & Cheatham by Edward J. Harper, II, Greenville, for plaintiffs-appellants.
Harrell & Titus by Richard C. Titus, Raleigh, for third-party defendant-appellant.
Barker, Kafer & Mills by James C. Mills, New Bern, for defendants-appellees.
The lengthy and involved factual and procedural background of this case follows. On 1 October 1975 defendants, the Gaskins brothers, entered into a contract for and purchased a Massey-Ferguson model 750 combine, a Cornhead and a grain table, from the plaintiff, Ayden Tractors, Inc., for $43,500. Defendants tendered, at that time, a Gleaner with trade-in value of $7,500. They made a $7,625 down payment, $3,825 of which was cash, the balance evidenced by a promissory note in the principal amount of $3,800. That note was due on 1 November 1975; plaintiffs charged no interest on the $3,800. The reverse of the purchase contract contained a warranty agreement covering the purchased equipment, which provided:
All NEW Massey-Ferguson agricultural machines and equipment (hereinafter called products) are sold by the dealer upon the following warranty and agreement given by the dealer, WHICH IS IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES AND CONDITIONS EXPRESSED OR IMPLIED, INCLUDING THE WARRANTIES AND CONDITIONS OF MERCHANTABILITY AND FITNESS FOR PURPOSE, and any other obligation on the part of the dealer or Massey-Ferguson. The dealer neither assumes nor authorizes any person to assume for it any other liability in connection with the sale of such products. The obligation of the dealer or Massey-Ferguson, under this warranty, is limited to replacing parts, at no charge to the Buyer, which prove defective with normal and proper use of the product for the purpose intended.
This warranty applies only to a new, unused Massey-Ferguson product, there being no warranty of any nature in respect to used products or new products that have been modified or altered, repaired, neglected, or used in any way which, in the opinion of the dealer or Massey-Ferguson, adversely affects its performance.
All such new, unused Massey-Ferguson products are warranted to be free from defects in material or workmanship, which may cause failure, for a period of twelve months from the date of delivery to Buyer or 1500 hours of use, whichever occurs first.
It is the responsibility of the Buyer, at his expense, to transport the machine or equipment to the dealer's service shop or, alternatively, to reimburse the dealer for any travel or transportation expense involved in fulfilling this warranty. When requested by the dealer, part or parts shall be returned for inspection, transportation prepaid, to a place designated by the dealer. IN NO EVENT SHALL THE BUYER BE ENTITLED TO RECOVER FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF CROPS, INCONVENIENCE, RENTAL OF REPLACEMENT EQUIPMENT, LOSS OF PROFITS, OR OTHER COMMERCIAL LOSS.
Defendants took delivery of the combine and accessories on 1 October 1975. The following day they began to experience problems with the combine. Evidence tended to show that the combine's diesel engine would overheat and then be automatically shut-down by a safety valve mechanism. Defendants testified that it ran about thirty minutes and stopped. Plaintiff was notified, and a serviceman was promptly dispatched. The safety valve was removed. For the remainder of the 1975 harvest season the machine worked properly about one-third ( 1/3) of the time it was in use. Defendants admit that plaintiff's representatives responded promptly on each of the numerous occasions service calls were made, and that parts of the combine were taken into the shop, repaired and returned. This work was all "under warranty."
In addition to the heating problem, defendants noticed, during the 1976 harvest season, that the combine's engine had begun to "use oil." Defendant Artis Gaskins testified that plaintiff's serviceman removed the engine, kept it for about a week, and re-installed it into the combine. Further: Toward the end of the 1976 season, the engine overheated, an hydraulic line burst, and the engine caught fire. Plaintiff was called, and its representative came to defendants' farm and removed the combine to Ayden, North Carolina. Plaintiff kept the combine from late fall of 1976 to sometime in August of 1977.
Apparently, because of the numerous problems defendants experienced with the machine, plaintiff asked the manufacturer and third party defendant, Massey-Ferguson, Inc., to extend the warranty covering defendants' machine. This modification was made in June of 1977. Defendants contend that a refinancing agreement was also executed in June of 1977, extending the repayment period on the debt owed for the combine. Plaintiff agrees that the warranty was extended in June 1977 but argues that the renewal contract was not executed until 22 December 1977. The parties are in accord on the fact that the renewal contained the following pertinent provisions:
In further consideration of such renewal, refinancing, restatement and extension of time of payment, I hereby expressly waive all claims arising out of the purchase of said property and all defenses, statutory or otherwise, to the payment hereof. I understand and agree that the execution and delivery of this agreement shall not rescind or revoke the refinanced Contract(s) or affect in any way the rights and obligations thereunder except as expressly amended or revised herein. [Emphasis added.]
Defendants began the 1977 harvest season using the combine. Despite extensive repairs made by plaintiff during the spring of 1977, the combine continued to overheat. Also, defendants testified that the batteries were not sufficiently charged by the machine's engine. Beverly Gaskins testified that plaintiff's representatives admitted to him and his brother that plaintiff could not correct the problem.
Subsequently, either in November 1977 or January 1978, defendants informed plaintiff that they were returning the combine, and asked plaintiff to refund that portion of the purchase price already paid. Plaintiff took possession of the combine in early 1978. Plaintiff sued, alleging that defendants owed $1,600 on the promissory note evidencing the partial down payment and $3,072.23 on an open account, and asked for judgment in those amounts against defendants with interest on same. Defendants answered, denying the principal allegations of the complaint, and counterclaimed, alleging that the problems with the combine and plaintiff's inability to correct them constituted a breach of warranty, and that the "down time" caused them financial loss. Defendants sought refund of the purchase price, down payment, and interest paid to date, lost profits, consequential damages, attorneys' fees and costs. Defendants filed, at the same time, a Third Party Complaint against Massey-Ferguson, Inc. and Massey-Ferguson Credit Corporation, as manufacturer and lien holder, respectively. Defendants prayed for the same relief against the third party defendants as they did against plaintiff, and in addition, asked that the original sales contract and financing agreement dated 1 October 1975 be declared null and void.
Plaintiff moved to dismiss the defendants' counterclaim pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, replied to the counterclaim in the alternative, and filed a cross-claim against the third-party defendants for indemnification. Similarly, the third-party defendants moved to dismiss the Third Party Complaint pursuant to Rule 12(b)(6) and filed, in the alternative, defenses to that Complaint.
Plaintiff moved for summary judgment on its claims for relief and against defendants on their counterclaim. A hearing in Pitt County Superior Court was held on plaintiff's motion together with third-party defendant's summary judgment motion. The trial court entered an order on 25 September 1979, granting plaintiff's first cause of action ($1,600, interest and costs), denying defendants' counterclaim, and continuing plaintiff's second cause of action ($3,072.23 on the open account). The court treated third-party defendant Massey-Ferguson Credit Corporation's Rule 12(b)(6) motion to dismiss as a motion for summary judgment and dismissed defendants' claim against it. Defendants appealed to this Court.
Upon filing and service of briefs, plaintiff and third-party defendants moved that the...
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