Barko Hydraulics, LLC v. Shepherd
Citation | 167 So.3d 304 |
Decision Date | 26 September 2014 |
Docket Number | 1121479. |
Parties | BARKO HYDRAULICS, LLC v. Michael SHEPHERD. |
Court | Supreme Court of Alabama |
Charles C. Eblen and Brandon Gutshall of Shook, Hardy & Bacon, LLP, Kansas City, Missouri, for appellant.
Frank M. Wilson, Montgomery; and Christina D. Crow and Nathan A. Dickson of Jinks, Crow & Dickson, P.C., Union Springs, for appellee.
Following a two-day trial in May 2013, a Bullock County jury returned a $450,000 verdict in favor of Michael Shepherd on a breach-of-warranty claim he asserted against Barko Hydraulics, LLC (“Barko”). Barko appeals the judgment entered on that verdict. We reverse and remand.
On September 12, 2008, Shepherd purchased a Barko 495ML knuckle boom loader (“the 495ML loader”) from G & S Equipment Company in Prattville for use in his logging operation.1 The price of the 495ML loader was $202,274, and Shepherd financed the purchase through Wells Fargo, agreeing to make 60 monthly payments of $4,039. In conjunction with Shepherd's purchase of the 495ML loader, Barko issued a warranty. That warranty provided, in part:
The warranty excluded coverage for “[d]amage due to failure to maintain or use the Barko product or part according to manuals, schedules, or good practice.” The warranty limited Barko's potential liability under the warranty as follows:
Finally, the warranty stated that it was issued “in lieu of all other warranties express or implied, statutory, written or oral” and that there was “no implied warranty of merchantability or fitness for a particular purpose.” Shepherd signed a receipt indicating that he understood the warranty and the maintenance requirements of the 495ML loader.
Shepherd testified that he was initially pleased with the performance of the 495ML loader after incorporating it into his logging operation. Shepherd testified, however, that after approximately four months of use the 495ML loader began having problems with its hydraulic system and with fuel consumption. Shepherd testified at trial that he informed G & S Equipment about these problems with the 495ML loader numerous times. G & S Equipment's owner, Mike Guy, testified that G & S Equipment was not notified of all of these problems. On behalf of Barko, G & S Equipment serviced the 495ML loader several times during Shepherd's first year of ownership, replacing the alternator, a turntable bearing, an air-heater contact switch twice, all under the warranty and without cost to Shepherd. Guy testified at trial that these were fairly minor repairs and that they were unrelated to the hydraulic system.
In August 2009, Shepherd brought the 495ML loader to G & S Equipment for it to complete some outstanding warranty repairs. At the time, the 495ML loader's clock was at approximately 1900 hours; thus, only 1 month or 100 hours remained before the warranty expired. G & S Equipment replaced the swivel, replaced the solenoids, and repaired the joysticks used by the operator to control the equipment on the loader. Guy testified at trial that those repairs were both common and relatively minor. Guy also testified, however, that during the course of making those repairs, his shop noticed that Shepherd's maintenance of the 495ML loader was lacking—specifically moving parts were not being greased and both hydraulic filters and air filters were not being changed in accordance with the manufacturer's recommended schedule. Both Shepherd and his employee, George Oliver, however, disputed the idea that the 495ML loader was not being properly maintained, testifying that they regularly maintained it in a fashion similar to every other piece of logging equipment they had used in their many years—approximately 20 and 30 years, respectively—of working in the logging industry. Shepherd also emphasized that G & S Equipment's written service records do not indicate that the 495ML loader was not being properly maintained.
In November 2010, when the 495ML loader had approximately 4,300 hours on its clock, Shepherd transported it to G & S Equipment for repairs after the hydraulic pumps began making noise. G & S Equipment confirmed that the hydraulic pumps had failed and notified Shepherd that the needed repairs, costing approximately $10,000, would not be covered under the warranty because the warranty period had expired. At Shepherd's request, G & S Equipment contacted Barko, which confirmed that it would not authorize or reimburse G & S Equipment for making the needed repair because of the expiration of the warranty. At that point, Shepherd told G & S Equipment that he could not afford to pay for the repairs to the 495ML loader, nor could he continue to meet his obligation to Wells Fargo. He therefore left the 495ML loader with G & S Equipment and apprised Wells Fargo of its location and of his intention to make no further payments on it. Wells Fargo subsequently repossessed the 495ML loader, sold it, and obtained a $124,184 deficit judgment against Shepherd.
On January 28, 2011, Shepherd sued Barko, G & S Equipment, and Cummins Mid–South, LLC, the manufacturer of certain component parts of the 495ML loader, asserting fraud, negligence and/or wantonness, and multiple breach-of-warranty claims. Shepherd sought both compensatory damages for lost profits and mental anguish and punitive damages. Ultimately, G & S Equipment and Cummins Mid–South were dismissed from the action, and, during the course of the trial, all of Shepherd's claims against Barko except a breach-of-express-warranty claim were withdrawn or dismissed. On May 2, 2013, the breach-of-express-warranty claim was submitted to the jury following a two-day trial and, after the jury returned a $450,000 verdict in favor of Shepherd and against Barko, the trial court entered a judgment consistent with the verdict. Barko's subsequent postjudgment motion renewing its previous motion for a judgment as a matter of law or, in the alternative, for a new trial was denied by the trial court on August 29, 2013; on September 23, 2013, Barko filed its notice of appeal to this Court.
On appeal, Barko argues that the trial court erred by denying Barko's motion for a judgment as a matter of law on Shepherd's breach-of-express-warranty claim and by allowing the jury to award damages for mental anguish and compensatory damages exceeding the amount it would have cost to repair the 495ML loader. We review Barko's first argument concerning its motion for judgment as a matter of law in accordance with the following standard of review:
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