Baker v. Wade

• Decision Date: 29 May 1997
• Docket Number: No. 20585,20585
• Citation: 949 S.W.2d 199
• Parties: 36 UCC Rep.Serv.2d 93 Lloyd E. BAKER and Eloise L. Baker, Plaintiffs-Appellants, v. Robert WADE and Norma Wade, d/b/a AAA Marine Sales and Service, Defendants-Respondents.
• Court: Missouri Court of Appeals

Page 199

949 S.W.2d 199

36 UCC Rep.Serv.2d 93

Lloyd E. BAKER and Eloise L. Baker, Plaintiffs-Appellants, v. Robert WADE and Norma Wade, d/b/a AAA Marine Sales and Service, Defendants-Respondents.

No. 20585

Missouri Court of Appeals,

Southern District,

Division Two.

May 29, 1997.

Application to Transfer Denied

Aug. 19, 1997.

Dennis J.C. Owens, Kansas City, for plaintiffs-appellants.

Richard L. Schnake, Neale & Newman, L.L.P., Springfield, Andrew J. Hager, Jr., Mt. Vernon, for defendants-respondents.

SHRUM, Judge.

This is a contract case where Plaintiffs filed a six-count petition alleging that a boat they purchased from Defendants was not new as was represented to them. The trial court awarded Plaintiffs $1,420.45 on their "breach of express warranty" claim (Count I) but denied all other counts.

Plaintiffs appeal only that part of the judgment that denied them relief under Count VI of their petition. Their sixth count sought recission of the purchase contract or, alternatively, refund of the purchase price pursuant to § 400.2-602 or § 400.2-608 of Missouri's Uniform Commercial Code (U.C.C.). We affirm.

FACTS

In 1989, Lloyd and Eloise Baker (Plaintiffs) purchased a boat and trailer for $13,400 from Robert and Norma Wade (Defendants). This transaction prompted litigation in which Plaintiffs alleged that the boat was not in a new condition as it was represented to be. In Count I, styled as "Breach of Express Warranty," Plaintiffs alleged some twenty-two defects in the goods that indicated the boat and trailer were not new. The prayer for relief in Count I was for damages of $10,600.

In Count VI, denominated "Recision" [sic], Plaintiffs pled in paragraph 2 what we discern to be a claim for equitable rescission of the purchase contract. Additionally, in paragraphs 3 and 4 of Count VI, Plaintiffs alleged that they had timely rejected the boat under § 400.2-602 or, in the alternative, revoked their acceptance of the boat under § 400.2-608. The prayer for relief in Count VI was for the Court to "set aside, cancel, annul and rescind the agreement to purchase said boat and motor" and order refund of the purchase price of the boat, i.e., $13,400.

Following a bench trial, the court entered the $1,420.45 judgment for Plaintiffs on Count I but denied them relief on all other counts.

On appeal, Plaintiffs make no complaint about that part of the judgment that awarded them $1,420.45. Instead, their single point maintains:

"The trial court erred by failing to rescind the contract because the weight of the evidence clearly indicated [Plaintiffs'] actions in attempting to return the boat and obtain a refund of the purchase price constituted either a rejection of the goods under § 400.2-601 ... or a revocation of acceptance under § 400.2-608 ..., thereby entitling [Plaintiffs] to an award of recision [sic] of the contract and the refund of their entire purchase price."

Under the U.C.C., the right of the buyer to refuse goods which do not conform to the contract for sale is defined in terms of rejecting the seller's tender, § 400.2-601, ¹ and of revoking the acceptance of goods after they have been accepted, § 400.2-608. ² See 4 ANDERSON ON THE UNIFORM COMMERCIAL CODE, § 2-601:3, at 71-72 (3d ed.1997). Where a buyer rightfully rejects or justifiably revokes acceptance of goods and then cancels the contract, such buyer is entitled to recover so much of the purchase price as has been paid. § 400.2-711. See Hollingsworth v. The Software House, Inc., 32 Ohio App.3d 61, 513 N.E.2d 1372, 1378 (1986).

Plaintiffs maintain that the evidence in this case compels a finding that they rightfully rejected the boat or justifiably revoked any acceptance thereof and that they cancelled the contract. With that as their premise, Plaintiffs argue that they were entitled to a judgment under Count VI for the full purchase price and the trial court erred when it denied Count VI. Fatal to this argument, however, is the fact that Plaintiffs were awarded damages under Count I for breach of express warranty and are thus assured of relief for Defendants' breach of the sales contact.

A buyer may seek damages for breach of contract under § 400.2-714 or may exercise the self-help remedy of rejection, but not both. Davis Industrial Sales Inc. v. Workman Construction Co., 856 S.W.2d 355, 362 n. 6 (Mo.App.1993). Damages recoverable for breach of warranty are mutually exclusive of the remedies that are available where there has been a rejection of the goods or a revocation of acceptance. Hospital Computer Systems v. Staten Island Hosp., 788 F.Supp. 1351, 1362 (D.N.J.1992) (citing J. WHITE AND R. SUMMERS, UNIFORM COMMERCIAL CODE, § 10-1 at 375 (2d ed.1980)). See Desilets Granite Co. v. Stone Equalizer Corp., 133 Vt. 372, 340 A.2d 65, 67 (1975); Gawlick v. American Builders Supply, 86 N.M. 77, 519 P.2d 313, 314 (App.1974). See also ANDERSON, § 2-602:5 at 115.

Section 400.2-714 clarifies why the remedy of damages for breach of warranty is inconsistent with the remedy of rejection or revocation of acceptance under the U.C.C. In pertinent part, § 400.2-714 reads:

"(1) Where the buyer has accepted goods ... he may recover as damages for any non-conformity....

"(2) 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 ...." (emphasis added).

The U.C.C. comment following § 400.2-714 says: "1. This section deals with the remedies available to the buyer after goods have been accepted...." Comment 3 discusses the remedy of breach of warranty. The language of this provision and the comments that follow make it clear that damages for breach of warranty are only available to a buyer who has accepted goods. See WHITE AND SUMMERS, § 10-1 at 551 (4th ed.1995). It is equally clear that the remedy of rejection or revocation of acceptance of goods, which requires Buyer to cancel the contract, is wholly inconsistent with the remedy of damages for breach of contract which requires acceptance of the contract. This analysis of U.C.C. provisions is consistent with the general rule involving equitable rescission which states that a party "may not at the same time successfully pursue both the remedy of rescission and that of an action for damages as they are inconsistent, the first resting upon a disaffirmance and the second resting upon an affirmance of the contract." Mills v. Keasler, 395 S.W.2d 111, 116 (Mo.1965).

In Alexander v. Link's Landing, Inc., 814 S.W.2d 614 (Mo.App.1991), a buyer sued the firm that sold him a boat. In a multiple count petition, buyer sought rescission of the contract (Counts I and II) and damages for conversion (Count III). A judgment for $10 actual damages and $500 punitive damages was entered on the buyer's conversion claim but his claim for rescission was denied. The buyer appealed. After this court rejected the buyer's claim that the damages were inadequate, we held that he could not seek reversal of that part of the judgment denying the rescission claim.

"[P]laintiff's claim for rescission and his conversion claim are inconsistent.

"Where a party has a right to pursue one of two inconsistent remedies, makes his election, institutes suit and prosecutes it to final judgment, or receives something of value on the claim, he cannot thereafter pursue another and inconsistent remedy.

"Here, plaintiff prosecuted his conversion claim to final judgment and received an award of $10 nominal and $500 punitive damages.... We have rejected plaintiff's complaints that he should have been granted more actual damages.... That being so, plaintiff is assured a money judgment on Count III of his first amended petition.... Having won that relief, we hold plaintiff cannot seek reversal of that portion of the judgment denying the rescission claim and pursue it anew on remand. Consequently, we need not, and do not, decide whether the trial court erred in failing to hold plaintiff never became owner of the Trojan boat. Plaintiff's third point is moot."

Id. at 620-21 (emphasis added) (citations omitted).

In this analogous situation where Plaintiffs are assured of a money judgment on Count I of $1,420.45, we hold that they cannot seek reversal of that portion of the judgment denying them a remedy on the theory they rejected or revoked acceptance of the boat.

In reaching this conclusion, we do not ignore Plaintiffs' argument that Alexander is factually distinguishable from their case. They say that "[t]he plaintiff [in Alexander ] made his election in the circuit court and then ... pursued three contradictory points on appeal; two were damage claims and the other was a rescission of contract claim." Plaintiffs maintain that in contrast to Alexander they never elected a remedy in circuit court. They aver that the trial judge chose the damage remedy for them and that he erred in doing so. Continuing, Plaintiffs claim they are entitled to elect the remedy of recission before this court and that they made that election when they appealed only that part of the judgment that denied the rescission.

This argument fails for several reasons. First, this very issue was addressed in Trien v. Croasdale Constr. Co., 874 S.W.2d 478 (Mo.App.1994). The trial court directed a verdict against plaintiffs on their rescission count after plaintiffs refused to elect between their claims for rescission and damages. Id. at 481. The court of appeals affirmed. The two remedies, it said, "present a classical case of irreconcilable inconsistency."...