Badilla v. Wal-Mart Stores E., Inc.

• Decision Date: 15 September 2016
• Docket Number: NO. 31,162,31,162
• Citation: 389 P.3d 1050
• Parties: Kenneth BADILLA, Plaintiff–Appellant, v. WAL–MART STORES EAST, INC., d/b/a Wal–Mart #850, Wal–Mart Stores East, Lp, and Mel Dissassa, Defendants–Appellees.
• Court: Court of Appeals of New Mexico

389 P.3d 1050

Kenneth BADILLA, Plaintiff–Appellant,

v.WAL–MART STORES EAST, INC., d/b/a Wal–Mart #850, Wal–Mart Stores East, Lp, and Mel Dissassa, Defendants–Appellees.

NO. 31,162

Court of Appeals of New Mexico.

Filing Date: September 15, 2016

Certiorari Denied, January 23, 2017, No. S-1-SC-36184

Garcia Law Office, Narciso Garcia Jr., Albuquerque, NM, for Appellant.

Rodey, Dickason, Sloan, Akin & Robb, P.A., Jeffrey M. Croasdell, Patrick M. Shay, Albuquerque, NM, for Appellees.

OPINION

KENNEDY, Judge.

{1} The Supreme Court of New Mexico has resolved the conflict between statutes of limitations in cases concerning personal injury claims arising from the sale of goods and product warranties in favor of the period set in NMSA 1978, Sections 55–2–313 to –315 (1961) of the Uniform Commercial Code (UCC), holding that Plaintiff's claims are not barred thereby. Bad illa v. Wal–Mart Stores East, Inc. (Badilla II ), 2015–NMSC–029, 357 P.3d 936. On remand, we return to this case to determine whether the district court's summary judgment on Plaintiff's claims under the UCC was properly rendered for Defendants. We conclude that it was, and affirm the district court.

BACKGROUND

{2} The facts in this case are aptly set out by our Supreme Court in Badilla II , and we will not repeat them beyond their relation to the issues presented in this opinion. In short, Plaintiff Badilla was employed as a tree trimmer and purchased work boots from Wal–Mart in October 2003. The boots' packaging described the boots as "iron tough," "rugged leather," "men's work boots," and stated that they were "designed for light to medium industrial use." Plaintiff examined the boots prior to buying them without having any conversations with store personnel about them, or whether they would be suitable for the type of work he did. He stated that he was unaware of any defect in the boots that made them unsafe at the time he purchased them.

{3} After his purchase, Plaintiff wore the boots in the course of his employment as a tree trimmer between eight and twelve hours a day, six days a week for nine months, racking up between 1871 and 2805 hours in them. He was aware that they were wearing, but maintains that the defect causing the injury was latent until he was actually injured. On July 28, 2004, Plaintiff was injured while attempting to move a log weighing about 150 pounds when the unglued sole of his boot got caught on debris, causing him to fall backwards and drop the log on top of himself. Plaintiff, represented by his present counsel in this action, initiated a worker's compensation action in March 2006 that was settled in January 2007.

{4} Plaintiff never provided notice of the boots' failure or of a claim under any warranty to Defendants prior to filing suit against them. He filed a complaint against Defendants in September 2007 more than three years after he was injured and beyond the statute of limitations for personal injury cases. See NMSA 1978, § 37–1–8 (1976). However, his complaint also sought damages for personal injury as a consequence of breach of warranties under New Mexico's UCC.¹ Our Supreme Court held that Defendant had adequately invoked the UCC, the provisions of which applied to this case. Specifically, the Supreme Court held that the Plaintiff's cause of action was "based in contract, and therefore the UCC's four-year statute of limitation, which governs actions for breach of warranty seeking personal injury damages, applies[,]" and specifically rejected any assertion that the case was tort-based. Badilla II , 2015–NMSC–029, ¶ 47, 357 P.3d 936. Because the portion of the summary judgment regarding Plaintiff's warranty claims under the UCC remained unresolved, the Supreme Court remanded the case to this Court for review of the district court's determination that "there is no genuine issue of material fact as to Plaintiff's inability to establish required elements of his causes of action for breach of express and implied warranty[,]" which we now address. Id. ¶ 50 (internal quotation marks omitted).

DISCUSSION

A. This Case Is Solely Governed By the UCC

{5} The scope of our opinion is defined by the Supreme Court's decision, deciding that Plaintiff's purchase was a contract for the present sale of goods, and his remedies are governed by the UCC. Id. ¶ 42. In holding that the UCC governs this case, the Court concisely stated the legal basis for Plaintiff's case:

Plaintiff contends that Defendants made express and implied warranties about the product Plaintiff purchased. Any such warranties gave Plaintiff the right to receive goods which complied with those warranties. If the product Plaintiff purchased was not as warranted, then Defendants breached the contract, and Plaintiff has the right to recover any damages resulting from the seller's breach of that warranty if the goods do not so comply.

Id. Thus, "the nature of the right Plaintiff's claims assert is the right to receive consequential damages as compensation for Defendant's alleged failure to provide Plaintiff with boots that conformed with the warranties Defendants allegedly made." Id . ¶ 43. This court is bound by the Supreme Court's ruling. See Alexander v. Delgado , 1973–NMSC–030, ¶ 9, 84 N.M. 717, 507 P.2d 778 ("[T]he Court of Appeals is to be governed by the precedents of this court."); Varney v. Taylor , 1968–NMSC–189, ¶ 5, 79 N.M. 652, 448 P.2d 164 ("[W]hat amounts in effect to an adjudication of the issue on a prior appeal, right or wrong, has become the law of the case, and is binding alike upon us and the litigants in all subsequent proceedings in the case."). We first address some preliminary matters unaddressed in our previous opinion.

1. "Common Law Warranties" Are Inapplicable

{6} Plaintiff attempts to expand the availability of rights and remedies that exist outside the UCC's purview to this case involving a contract for the sale of goods, arguing that there are "common law warranties" that may apply to this case. See Camino Real Mobile Home Park P'ship v. Wolfe , 1995–NMSC–013, 119 N.M. 436, 891 P.2d 1190, overruled on other grounds by Sunnyland Farms, Inc. v. Cent. N.M. Elec. Coop., Inc ., 2013–NMSC–017, ¶ 15, 301 P.3d 387. The Supreme Court held that Plaintiff, by specifically choosing to seek a remedy under the UCC, made the UCC the applicable law for this case. See Badilla II , 2015–NMSC–029, ¶ 44, 357 P.3d 936 ("Plaintiff's cause of action asserts this claim under the UCC by invoking its statutory language.").² The Supreme Court also held that Plaintiff's suit is circumscribed by the UCC and does not involve common law remedies. Id. ¶ 39. Because the Supreme Court determined in this case that "the UCC governs claims based in contract" and that tort law based in negligence has no application here, id . ¶ 49, there are no "common law warranties" to be considered in this case, having been entirely displaced by the applicability of the UCC to this case. We proceed in our analysis solely pursuant to the UCC.

2. Standard of Review

{7} "The standard of review on appeal from summary judgment is de novo." Farmers Ins. Co. of Ariz. v. Sedillo , 2000–NMCA–094, ¶ 5, 129 N.M. 674, 11 P.3d 1236. Summary judgment is appropriate where the facts are undisputed, and the movant is entitled to judgment as a matter of law. Hydro Res. Corp. v. Gray , 2007–NMSC–061, ¶ 14, 143 N.M. 142, 173 P.3d 749. "[W]e view the facts in a light most favorable to the party opposing the motion and draw all reasonable inferences in support of a trial on the merits[.]" Handmaker v. Henney , 1999–NMSC–043, ¶ 18, 128 N.M. 328, 992 P.2d 879.

{8} We are charged by the Supreme Court with reviewing the district court's summary judgment that Plaintiff was unable to establish the required elements of his causes of action for breach of express and implied warranty. Those causes of action and remedies are based in the UCC. "Interpretation of a statute is an issue of law which we review de novo." Badilla II , 2015–NMSC–029, ¶ 12, 357 P.3d 936 (alterations, internal quotation marks, and citation omitted). Our purpose in construing a statute is to determine and give effect to the Legislature's intent. Id. To do so, we first look to the plain language of the statute. Id. "When interpreting a statute, we are also informed by the history, background, and overall structure of the statute, as well as its function within a comprehensive legislative scheme." Id. (internal quotation marks and citation omitted). "If the [UCC] is the basis of recovery, a plaintiff will not be permitted to fulfill only certain requirements while neglecting others[.]" Berry v. G. D. Searle & Co. , 56 Ill.2d 548, 309 N.E.2d 550, 556 (1974).

B. Elements of the Cause of Action for Breach of Warranties Under the UCC

{9} "A breach of warranty presents an objective claim that the goods do not conform to a promise, affirmation, or description, or that they are not merchantable."

Jaramillo v. Gonzales , 2002–NMCA–072, ¶ 13, 132 N.M. 459, 50 P.3d 554. The elements of a cause of action for a breach of warranty are "the existence of a defect caused by the seller, that the buyer notified the seller and sought repairs, and that the seller failed or refused to make repairs." State ex rel. Concrete Sales & Equip. Rental Co. v. Kent Nowlin Constr., Inc. , 1987–NMSC–114, ¶ 18, 106 N.M. 539, 746 P.2d 645. When a breach of warranty results in personal injury, the buyer can be entitled to "recover direct, incidental, and consequential damages." Manouchehri v. Heim , 1997–NMCA–052, ¶ 10, 123 N.M. 439, 941 P.2d 978 ; see NMSA 1978, § 55–2–715(2)(b) (1961) ("Consequential damages resulting from the seller's breach include ... injury to person or property proximately resulting from any breach of warranty."). Defendants argue that notice in this case was untimely and unreasonable; Plaintiff demurs, stating that it was within the statute of limitations. We address this issue first.

1. Notice of the Breach Within a Reasonable Time After Its Discovery

{10} A buyer wishing to sue a...