Carpetland U.S.A. v. Payne

• Decision Date: 10 April 1989
• Docket Number: No. 49A02-8810-CV-376,49A02-8810-CV-376
• Parties: 8 UCC Rep.Serv.2d 942 CARPETLAND U.S.A., Defendant-Appellant, v. Bezzel PAYNE, Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 306

536 N.E.2d 306

8 UCC Rep.Serv.2d 942

CARPETLAND U.S.A., Defendant-Appellant, v. Bezzel PAYNE, Plaintiff-Appellee.

No. 49A02-8810-CV-376.

Court of Appeals of Indiana,

First District.

April 10, 1989.

William J. Tucker, Klineman, Rose, Wolf and Wallack, Indianapolis, for defendant-appellant.

Ben F. Hatfield, Coates, Hatfield, Calkins and Wellnitz, Indianapolis, for plaintiff-appellee.

RATLIFF, Chief Judge.

STATEMENT OF THE CASE

Carpetland, U.S.A. appeals the judgment of the trial court awarding Bezzel Payne $1,387.96 in damages resulting from Payne's purchase of allegedly defective carpet. We affirm.

FACTS

On November 10, 1986, Payne went to Carpetland for the purpose of purchasing carpeting for a house she and her husband owned in which her son, his girlfriend, and their children resided. Payne was assisted by Brad Lewis, a Carpetland sales representative. Payne claimed that Lewis informed her that the carpeting came with a one-year warranty.

Payne entered into an agreement with Carpetland for the sale and installation of a carpet and pad. The total contract price was $2,387.96 including the carpet, pad, installation and taxes. This agreement contained an express provision denying the existence of all express or implied warranties including warranties of merchantability or fitness for a particular purpose.

The carpet and pad were installed approximately ten (10) days after purchase. Three or four weeks later the pile or nap of the carpet started coming loose creating bald spots. Payne complained about the condition of the carpet, and Carpetland sent a carpet installer to inspect the problem. The installer cut off the loose strings with a razor blade and advised Payne's son to cut off any additional loose strings by the same method. The condition of the carpet continued to deteriorate. Payne made a number of complaints, and each time a carpet installer was sent to inspect the problem.

Carpetland refused to replace the carpeting, and on July 23, 1987, Payne filed a complaint against Carpetland in small claims court alleging that Carpetland sold her "defective carpet". Record at 4. Carpetland denied Payne's claim. After a trial on the merits, the trial court entered judgment in favor of Payne for the total purchase price and costs.

ISSUES

Carpetland raised three (3) issues on appeal which we have rephrased and renumbered as follows:

1. Was there sufficient evidence to support the trial court's judgment in favor of Payne?

2. Were the damages awarded Payne excessive?

DISCUSSION AND DECISION

Before addressing the issues raised by Carpetland, we will comment upon preliminary matters raised in Payne's appellee's brief and which we have felt compelled to raise sua sponte. Carpetland's brief argues this case wholly in terms of a breach of contract suit. Payne contends, and we agree, that the record clearly reveals that this action was tried under a breach of warranty theory. We are fully aware that warranties, while collateral to the principal purposes of a contract, are nonetheless part of that contract. Aamco Transmission v. Air Systems, Inc. (1984), Ind.App., 459 N.E.2d 1215, 1217, trans. denied, quoting, McCarty v. Williams (1914), 58 Ind.App. 440, 445, 108 N.E. 370, 372. However, we are equally cognizant of the fact that a body of law uniquely suited to warranty issues has evolved in this state, and contrary to Carpetland's characterization of the suit, we will address the issues raised herein according to those principles.

In the present case Payne testified that Brad Lewis informed her that the carpet she eventually purchased was guaranteed for one year. Because this affirmation was made orally and was not contained in a writing intended as a final expression of the agreement, whether the statement amounts to an express warranty is a question of fact. Art Hill, Inc. v. Heckler (1983), Ind.App., 457 N.E.2d 242, 244, trans. denied. From its judgment, apparently the trial court found that Lewis's assurance constituted an express warranty. Indiana Code section 26-1-2-313 which defines the language by which an express warranty may be created reads as follows:

"Express warranties by affirmation, promise, description, sample

"Sec. 313. (1) Express warranties by the seller are created as follows:

(a) any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

(b) any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

(c) any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the goods shall conform to the sample or model.

(2) It is not necessary to the creation of an express warranty that the seller use formal words such as 'warrant' or 'guarantee' or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty."

This statute requires some representation, terms or conditions or some definite statement as to how a product is warranted. Candlelight Homes, Inc. v. Zornes (1981), Ind.App., 414 N.E.2d 980, 983. Payne testified, "I just asked him [Lewis], uh, how long--was there a warranty with it, and he said a year. If anything went wrong, they would replace it, and then he didn't replace it." Record at 39. After Payne admitted that she did not read any written warranties, the following colloquy took place:

"Q. Did he [Lewis] tell you--what did he tell you about a warranty?

"A. He said it was warranty [sic] anything that went wrong within a year that they would lay the carpet, it being new carpet. He said it was good carpet, so it wasn't good.

"Q. So you're saying that he said that whatever went wrong that new carpet would be installed?

"A. It was guaranteed for a year if anything went wrong."

Record at 40. Carpetland's sales representative's assertion may have been broad in scope, but Lewis unambiguously assured Payne that Carpetland would replace the carpet if any defects in the carpet surfaced within one year of purchase. It is our opinion that Lewis's assertion was sufficient to create an express warranty.

Additionally, in order for the seller's assurances to constitute an express warranty under the statute, the assurance must constitute a promise which was part of the basis of the purchase agreement. Art Hills, 457 N.E.2d at 245. In order to prove that Lewis's assertion was part of the basis for the bargain, Payne need not show that she relied on Lewis's statement. Cf, Shambaugh v. Lindsay (1983), Ind.App., 445 N.E.2d 124, 126-27. Payne need only show that the warranty was entered into the contract as an intended element thereof, and as a part of the consideration for the purchase price. Id. at 127, quoting McCarty v. Williams (1915), 58 Ind.App. 440, 445-46, 108 N.E. 370, 372. In McCarty the court stated:

"It is not necessary that it should be true that the buyer would not have purchased but for the warranty. If, in addition to the transfer of the property he can, for the same price or for a greater price, obtain the seller's agreement to insure the quality of the goods, such agreement goes with the goods as a part of the consideration, and the buyer is entitled to the benefit of his bargain in this regard, whether he would or would not have bought the goods without this additional consideration."

58 Ind.App. at 445, 108 N.E. at 372. Lewis made certain factual assertions while bargaining with Payne, and we cannot say that the trial court erred in refusing to deny Payne the benefit of her bargain.

Having determined that Lewis's statement constituted an express warranty, we must next examine whether or not the disclaimer contained in the purchase agreement constitutes a bar to Payne's recovery based upon breach of this express warranty. We are persuaded that the disclaimer does not constitute any such bar.

On the reverse side of the sales contract, printed in light grey capital letters, the following disclaimer appears:

"EXCEPT FOR DESCRIPTION ON REVERSE SIDE HEREOF, BUYER ACKNOWLEDGES THAT NO EXPRESS OR IMPLIED WARRANTIES (INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS) HAVE BEEN MADE BY SELLER AND SELLER HEREBY DISCLAIMS ALL SUCH WARRANTIES. THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THE FACE HEREOF."

Record at 25. Indiana Code section 26-1-2-316(1) governing the exclusion or modification of warranties reads as follows:

"Sec. 316. (1) Words or conduct relevant to the creation of an express warranty and words or conduct tending to negate or limit warranty shall be construed wherever reasonable as consistent with each other; but subject to the provisions of IC 26-1-2-202 on parol or extrinsic evidence, negation or limitation is inoperative to the extent that such construction is unreasonable."

If an express warranty and a disclaimer of an express warranty exist in the same sale, an irreconcilable conflict emerges. Woodruff v. Clark County Farm Bureau Coop. Ass'n (1972), 153 Ind.App. 31, 52, 286 N.E.2d 188, 200. If it is unreasonable or impossible to construe the language of an express warranty and the language of a disclaimer as consistent, the disclaimer becomes inoperative. Art Hill, 457 N.E.2d at 245; Jones v. Arbriani (1976), 169 Ind.App. 556, 572, 350 N.E.2d 635, 645; Woodruff, 153 Ind.App. at 52, 286 N.E.2d at 200.

In the present case Lewis's assertion that the carpet was guaranteed for one year and the disclaimer which purported to negate all express warranties were clearly inconsistent. As in Woodruff, the seller was running "both with the hares and the hounds and in so doing creat[ed] an ambiguity." 153 Ind.App. at 52, 286 N.E.2d at 200. Therefore, the disclaimer is deemed inoperative...