Bobb Forest Products v. Morbark Industries
| Decision Date | 30 September 2002 |
| Docket Number | No. 02 BA 3.,No. 01 BA 25.,01 BA 25.,02 BA 3. |
| Citation | 151 Ohio App.3d 63,783 N.E.2d 560,2002 Ohio 5370 |
| Court | Ohio Court of Appeals |
| Parties | JBOBB FOREST PRODUCTS, INC., Appellee, v. MORBARK INDUSTRIES, INC., Appellant, et al. |
Gallagher, Bradigan, Gams, Pryor & Littrell, James R. Gallagher and Kevin R. Nose, Columbus, for appellee.
Warner, Norcross & Judd, L.L.P., and Kevin G. Dougherty, Grand Rapids, MI; Banker & White and Harry W. White, Bellaire, for appellant.
{¶ 1} This timely appeal comes for consideration upon the record in the trial court, the parties' briefs, and their oral argument before this court. Defendant-appellant, Morbark, Inc., appeals from the judgment of the Belmont County Court of Common Pleas which entered a verdict in favor of plaintiff-appellee, Bobb Forest Products, Inc. ("BFP") in the amount of $1 million against Morbark and co-defendant, John McCormick, who is not a party to this appeal. We are asked to decide (1) whether BFP should be allowed to recover on express and implied warranty theories, (2) whether the trial court should have granted a new trial because the jury's damages award is against the manifest weight of the evidence, and (3) whether the trial court properly granted BFP's motion for a nunc pro tunc entry reflecting judgment against Morbark, Inc. rather than Morbark Industries, Inc. We conclude that the trial court properly granted BFP's motion for the nunc pro tune entry, properly denied Morbark's motion for a new trial as the jury's verdict was supported by competent, credible evidence, and properly denied Morbark's motions seeking to prevent BFP from recovering under theories of express and implied warranties. Thus, we affirm the trial court's judgment.
{¶ 2} Shon Bobb was sole shareholder and president of BFP, a corporation established to run a sawmill located in Belmont County, Ohio. When Bobb was initially starting up BFP's operations, he tried to obtain a Clearman brand sawmill for BFP's use. However, he would have had to wait six months to obtain a Clearman saw. He did not want to wait that long at the time as he would not be able to make the most out of BFP's current opportunities in the market.
{¶ 3} McCormick heard that Bobb was looking to buy a sawmill and, as an authorized dealer of Morbark brand sawmills, approached Bobb in an effort to sell him a Morbark sawmill. Bobb had reservations about purchasing a Morbark sawmill as they had a reputation in the industry as a bad sawmill. However, McCormick assured Bobb that Morbark built a great sawmill. Bobb also informed McCormick of the specific level of production he sought to get from the mill. McCormick assured him that the mill would meet his needs. McCormick also provided Bobb with Morbark's sales brochures. Those brochures promised that the mill was designed for "sawing grade, dimensional lumber and cants," that it was capable of "producing from two to ten million board feet per year," and that the mill would be "[f]actory built to exact tolerances for high production and accurately cut lumber." Bobb was also provided with three videotapes extolling the virtues of the Morbark sawmill.
{¶ 4} Bobb then talked to Vern Sandborn, the sales representative for Morbark's sawmill division. Sandborn assured Bobb that Morbark sawmills were running great, there were no maintenance problems, and they were a very good machine. Sandborn indicated that the machine would work very well for what Bobb needed. Based on the sales brochures, the videotapes, and the assurances from both McCormick and Sandborn, Bobb decided to purchase a Morbark sawmill on behalf of BFP. He arranged for McCormick to install the sawmill as a turnkey operation. When the mill was turned over to him all the components would be installed, and he could begin sawing wood. The purchase price of this turnkey operation was $302,550. After agreeing to purchase the Morbark sawmill, Bobb proceeded to do other things related to the startup of the business, such as hiring employees, buying extra equipment, and obtaining a supply of logs.
{¶ 5} When the mill was shipped to McCormick for installation, Morbark sent a warranty document with the shipment. The warranty contained specific disclaimer language that negated any express warranties made by Morbark and limited BFP's damages solely to repair or replacement of the sawmill. Furthermore, it limited its liability to six months after the installation date. After Morbark shipped the sawmill to McCormick, he installed it at BFP's site. BFP never received a copy of that warranty and Bobb testified that he did not see a copy of the document until a week before trial.
{¶ 6} The mill was supposed to be ready December 25, 1995. However, due to delays in delivery from Morbark and cold weather on site, McCormick did not complete the installation until around March 15, 1996. When Bobb saw the sawmill and the related equipment he was surprised to discover that some of the equipment was not Morbark equipment. McCormick had contracted for local suppliers to manufacture some of the equipment according to McCormick's designs. The invoice McCormick gave to Bobb reflected that fact. McCormick told Bobb that Morbark had agreed to the arrangement and if the locally produced equipment did not work, it would be replaced. Sandborn testified that the locally made equipment was neither inadequate nor improper for the purposes it was meant to serve.
{¶ 7} Bobb first began to run the sawmill on April 1, 1996. He immediately began experiencing problems with the saw. For instance, his employees had to continually tighten the bolts on the mill and the mill continually failed to cut lumber properly. Those problems resulted from both Morbark parts and the components McCormick had manufactured locally. McCormick came out to BFP's jobsite numerous times over the next couple of months in order to fix those problems.
{¶ 8} In June 1996, McCormick was in South America with Sandborn overseeing the installation of a Morbark piece of equipment. Bobb continued to have problems with the mill. Because he could not contact McCormick about the problems, he called Morbark's main office in Winn, Michigan. The next day, Morbark had Rod Roosa, the man who actually built the sawmill for Morbark, come down to fix the problems. Roosa saw that the mill was cutting thick and thin lumber and did not notice any maintenance problems. He found various problems with the sawmill: the tracks were not installed level; the bolts holding the sawmill together were not tight (Bobb testified that BFP employees had to tighten the bolts before almost every shift); the factory had incorrectly machined the wheels, which caused the tracks they ran on to wear prematurely; and the cooler on the hydraulics system was not working, causing the hydraulic oil to be running too hot. Roosa fixed those problems and installed a new setworks on the sawmill in an effort to fix the inconsistent width of the cut lumber. He testified that the sawmill cut straight lumber after he was done with it. He also testified that, based on his experience, many of the problems were Morbark's fault.
{¶ 9} Roosa stayed on site for a couple of weeks until McCormick and Sandborn arrived. The two knew of the problems with the sawmill and knew that Roosa was on site working on the sawmill. Therefore, they came straight to BFP upon arrival from South America. After Sandborn and McCormick arrived, Roosa returned to Morbark's plant in Michigan, as he felt those two were more qualified to repair the machine. Sandborn and McCormick used Locktite to secure the bolts on the sawmill into place. Sandborn also found that the wheels were machined incorrectly and had new wheels made and installed. Finally, he thought that Roosa made a mistake when he raised one track in an attempt to level the tracks, as he thought this made the track unlevel. Sandborn lowered the track to its original position. When he was done, Sandborn thought the problems had been fixed, so he returned to Michigan.
{¶ 10} After Morbark's employees had tried to fix the problems with the sawmill, the problems persisted. For instance, the bolts kept coming loose and it would take up to two hours each day to tighten them down. Bobb borrowed over $100,000 from his parents in an effort to make the sawmill productive. However, the mill kept cutting the lumber improperly and Bobb began to get complaints from his customers. Due to the problems with the lumber BFP was producing, in December 1996 Bobb's lumber broker told him he could no longer sell BFP lumber.
{¶ 11} That same month, Bobb and his parents had a meeting with McCormick in McCormick's office and they, as a group, called Morbark again. Morbark sent Sandborn down to try to fix the problems. This time, Sandborn discovered that, among other problems, Morbark had put the wrong bolts on the sawmill. The bolts used were too small and only one thread of the bolt was catching on the mill, which led to the continual need to tighten the screws. Sandborn acknowledged that the loose bolts may have caused the sawmill to cut the lumber improperly. He further acknowledged that had the proper bolts been used and locktited down, they probably never would have come loose. In addition, the new wheels installed on the sawmill in June were machined incorrectly. Upon hearing that it might take Sandborn an additional two weeks to complete repairs, Bobb had him stop attempting the repairs. Bobb then shut down operations and closed the sawmill. In the nine months it was operational, the sawmill produced approximately 1.3 million board feet of wood including the amount of improperly cut lumber. Bobb testified that 80 percent of the problems were related to Morbark equipment and 20 percent of the problems were related to non-Morbark equipment.
{¶ 12} Soon...
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