Belcher v. Versatile Farm Equipment Co.

• Citation: 443 So.2d 912
• Court: Supreme Court of Alabama
• Decision Date: 22 December 1983
• Parties: 37 UCC Rep.Serv. 706 Alan H. BELCHER v. VERSATILE FARM EQUIPMENT COMPANY, et al. INTERNATIONAL HARVESTER CREDIT CORPORATION v. DIEL & THOMPSON, INC. 82-798, 82-838.

Page 912

443 So.2d 912

37 UCC Rep.Serv. 706

Alan H. BELCHER v. VERSATILE FARM EQUIPMENT COMPANY, et al.

INTERNATIONAL HARVESTER CREDIT CORPORATION v. DIEL & THOMPSON, INC.

82-798, 82-838.

Supreme Court of Alabama.

Dec. 22, 1983.

M. Wayne Wheeler, Birmingham, for appellant Alan H. Belcher (82-798).

John S. Civils, Jr. of Huie, Fernambucq & Stewart, Birmingham, for appellant International Harvester Credit Corp. (82-838).

Steven F. Casey of Balch, Bingham, Baker, Ward, Smith, Bowman & Thagard, Birmingham, for appellee Versatile Farm Equip. Co. (82-798).

Robert M. Echols, Jr., Birmingham, for appellee Diel & Thompson, Inc. (82-838).

SHORES, Justice.

Belcher, the plaintiff below, appeals from a judgment in favor of the defendants, Versatile Farm Equipment Company (Versatile), Clanton Tractor Company (Clanton), and International Harvester Credit Corporation (IHCC). We affirm.

Belcher filed a complaint for declaratory judgment and rescission of a contract for the sale of a tractor against the above-named defendants and Diel & Thompson, Inc., a dealer in Versatile equipment. Diel & Thompson was dismissed for lack of jurisdiction. ¹ IHCC appeals from the order dismissing Diel & Thompson. The appeals by Belcher and IHCC were consolidated. Following a judgment for defendants, ² Belcher filed a motion for new trial and/or motion for judgment notwithstanding the verdict and a motion for clarification. The trial court denied both motions. A motion to enter a judgment in a sum certain or, in the alternative, motion to amend judgment was filed by IHCC. This motion was granted, and a money judgment in the amount of $30,559.98 was rendered against Belcher.

In 1980, Belcher purchased a Versatile 150 tractor from Clanton Tractor Company. Clanton procured this tractor for Belcher from Diel & Thompson, Inc., of Toledo, Illinois, the nearest Versatile dealer with a 150 model. IHCC financed the sale from Clanton to Belcher, and Belcher assigned a security interets to IHCC. Clanton assigned and transferred to IHCC the contract with Belcher. Belcher has made no payments toward this debt.

Soon after delivery of the Versatile 150, according to Belcher, problems with the machine began. These included the breaking of the spindles, a loud noise in the power take-off, a leak in the hydraulic system, damaged O-rings in the hydrostatic system, several solenoid burn-outs, and various problems with the battery.

The tractor was accompanied by Versatile's limited warranty included in the owner's manual. The exclusive remedy for breach of the Versatile warranty was the repair and replacement of defective parts. The warranty also contained a caveat that the alteration or addition of equipment not approved by Versatile for installation on Versatile equipment would avoid the warranty. Clanton was authorized by Diel & Thompson to perform warranty repair work on the tractor.

The tractor was taken to Clanton four times for warranty-covered repair work. Each time, a spindle was repaired and, in addition, on one occasion, the hydraulic system was repaired and, on another, the faulty solenoid was repaired. Each time, Clanton performed the necessary repair work and submitted repair reports/claims to Diel & Thompson. Diel & Thompson, in turn, forwarded warranty claim forms to Veratile for credit. Each time the tractor was taken to Clanton, it was repaired and left the shop operating properly. A few smaller problems were taken care of at the Belcher farm.

The fifth and last time the tractor broke down, Belcher refused to take it to Clanton for repairs. He continued to operate the tractor until the front and rear spindles broke. The tractor was in this condition at the time of trial.

Belcher brought suit against the defendants, seeking rescission of the contract for the sale of the tractor, alleging breach of warranty by Versatile and substantial impairment of the value of the tractor. As indicated, after hearing all the evidence, the trial court rendered a judgment in favor of the defendants and awarded IHCC $30,559.98.

Belcher alleges on appeal that the trial court erred by disregarding facts in evidence and by misapplication of the law of warranty. Belcher also alleges error on the part of the trial court in sustaining certain objections made during Belcher's cross-examination of Versatile's expert witness.

The Alabama Code clearly allows a seller to limit his warranty. Ala.Code 1975, § 7-2-316. The Versatile warranty was limited to the repair and replacement of defective or nonconforming parts and was structured in accordance with § 7-2-316. This section provides that express warranties may be limited by putting the limitations in writing, by using the word "merchantability," and by making the writing conspicuous. The Versatile warranty was prominently displayed on the inside cover of the owner's manual opposite the table of contents.

This Court has held that a contractual limitation of damages will not be allowed where the circumstances cause an exclusive or limited remedy to fail of its essential purpose or where to allow such limitation or exclusion would be unconscionable. Volkswagen of America, Inc. v. Harrell, 431 So.2d 156 (Ala.1983). We have also held that, if a jury finds that the limited warranty has "failed of its essential purpose," it may then award damages under the general remedy provisions of the Uniform Commercial Code. Winchester v. McCulloch Brothers Garage, 388 So.2d 927, 928 (Ala.1980). The facts in the present case do not warrant the application of either of these conclusions.

The record also reveals that Versatile honored this warranty, and that each time the tractor was taken to Clanton for repairs, it was repaired, defective parts were replaced, and the tractor was returned to good working order. Efforts to "make right" the tractor by repairing it were not stopped until Belcher himself refused to bring the tractor to Clanton for repairs.

In addition, the warranty warns that the alteration or the addition of equipment not manufactured for installation on Versatile equipment, without the prior approval of Versatile, will void the warranty. Belcher made several unauthorized alterations to the tractor. He welded brackets on the buckets of the front end loader and periodically installed forks in the brackets for moving rolls of hay. In order to counter-balance the tractor when hay was on the forks, Belcher placed additional weight, totalling...