Chrysler Corp. v. Wilson Plumbing Co., Inc.

• Decision Date: 26 June 1974
• Docket Number: 2,Nos. 1,48833,Nos. 48832,INC,CHRYSLER-PLYMOUT,3,s. 48832,s. 1
• Citation: 132 Ga.App. 435,208 S.E.2d 321
• Parties: , 15 UCC Rep.Serv. 78 CHRYSLER CORPORATION v. WILSON PLUMBING COMPANY, INC. DeKALBv. Robert WILSON et al
• Court: Georgia Court of Appeals

Page 321

208 S.E.2d 321

132 Ga.App. 435, 15 UCC Rep.Serv. 78

CHRYSLER CORPORATION v. WILSON PLUMBING COMPANY, INC.

DeKALB CHRYSLER-PLYMOUTH, INC. v. Robert WILSON et al.

Nos. 48832, 48833.

Court of Appeals of Georgia, Division Nos. 1, 2, 3.

June 26, 1974.

Rehearing Denied July 18, 1974.

Alston, Miller & Gaines, Ben F. Johnson, III, Atlanta, for Chrysler corp.

Levine, D'Alessio & Cohn, Morton P. Levine, Atlanta, for DeKalb Chrysler-Plymouth.

Rich, Bass, Kidd & Broome, Casper Rich, Bryan Cavan, Decatur, for appellees. Syllabus Opinion by the Court

PANNELL, Judge.

Robert Wilson and Wilson Plumbing Company, Inc. (Robert Wilson being the sole stockholder) brought an action against DeKalb Chrysler-Plymouth, Inc., a local dealer, and Chrysler Corporation, the manufacturer, in four counts. Count No. 1 alleged: 'That the defendants, as manufacturer and merchant of the subject automobile, 'did at all times herein, both expressly and impliedly, warrant that the same was merchantable and fit for the ordinary purposes for which an automobile is designed, i.e., a dependable mode of transportation, and that the plaintiff, Wilson Plumbing Co., Inc., relied on said warranties as aforementioned, but said automobile was not merchantable nor fit for the purpose for which it was made and designed and that the defendants did breach said warranties and that the losses incurred are the sole and proximate consequence of the defendants' breach.' (Emphasis supplied.) On this count, the plaintiff corporation sought recovery of the purchase price of a new automobile, less the salvage value of the automobile, alleged to be $150, plus expenses involved in numerous repairs, allegedly as a result of defendants' breach of warranties. Count 2 sought the same damages based upon negligent and defective construction. Count 3, on behalf of the individual plaintiff, sought recovery for the alleged wilful and intentional destruction of signs, not complimentary to the defendants, which plaintiff had placed about the subject automobile on a vacant lot owned by plaintiff, after defendants had refused to repair it; and in addition to the damages for the destruction of the signs, sought punitive damages in the amount of $10,000. Count 4 similarly sought damages for a later visit whereby alleged agents of the defendants again attempted to tear down and destroy the signs which had been replaced, and when the plaintiff, Robert Wilson, came out to remonstrate and grabbed the door of the automobile in which the alleged agents were seeking to leave, they attempted to run him down. On this count, Robert Wilson seeks $50 nominal damages and $25,000 punitive damages. Counts 2 and 3 were eliminated from the trial of the case, leaving Counts 1 and 4 for consideration of the jury. After motions for directed verdict by the defendants as to Counts 1 and 4 were overruled, the case was submitted to the jury on these counts and the jury found a verdict in favor of the plaintiff in the amount of $4,500 on Count 1 and $5 actual damages and $12,000 punitive damages on Count 4. The defendants' motions for judgments notwithstanding that verdict, or in the alternative the grant of a new trial were overruled by the trial judge and the defendants appealed separately to this court.

1. While ordinarily under Code § 109A-2-314 there is no implied warranty existing between a manufacturer and an ultimate consumer, this is due to the fact that no privity of contract exists between the two. See Chaffin v. Atlanta Coca Cola Bottling Co., 127 Ga.App. 619, 194 S.E.2d 513. However, where an automobile manufacturer, through its authorized dealer issues to a purchaser of one of its automobiles from such dealer admittedly as a part of the sale a warrantly by the manufacturer running to the purchaser, privity exists and Code § 109A-2-314 becomes operative. See Studebaker Corp. v. Nail, 82 Ga.App. 779, 784, 62 S.E.2d 198. The manufacturer, therefore, if it desires to exclude the implied warranty arising by operation of law, must meet the requirements of Code § 109A-2-316(2), that is, by a writing expressly referring to merchantability which exclusion of the implied warranty must be conspicuous. Code § 109A-1-201(10) defines conspicuous as: "Conspicuous': A term or clause is conspicuous when it is so written that a reasonable person against whom it is to operate ought to have noticed it. A printed heading in capitals as: (Nonnegotiable Bill of Lading) is conspicuous. Language in the body of a form is 'conspicuous' if it is in larger or other contrasting type or color. But in a telegram any stated term is 'conspicuous.' Whether a term or clause is 'conspicuous' or not is for decision by the court.' We must accordingly hold that the trial judge erred in not making such determination rather than submitting this question for decision by the jury. He further erred in charging on implied warranty as to the Chrysler Corporation as the written exclusion of the implied warranty, and as to merchantability, met the requirements of the statute as to conspicuousness.

2. The defendant dealer contends that the plaintiff purchaser signed a 'retail buyer's order' which relieved it from all warranties. This order, in small print before the signature on the front of the form, so far as here material recited: 'The front and back of this order comprise the entire agreement affecting this purchase and no other agreement or understanding of any nature concerning same has been made or entered into, or will be recognized, I hereby certify that no credit has been extended to me for the purchase of this motor vehicle except as appears in writing on the face of this agreement. I have read the matter printed on the back hereof and agree to it as a part of this order the same as if it were printed above my signature. I certify that I am 21 years of age, or order, and hereby acknowledge receipt of a copy of this order.', and 'It is understood that this car is sold as is and that DeKalb Chrysler-Plymouth, Inc. makes no warranties or representations as to the present or past condition of this car except as specifically stated on the retail buyers order, as that DeKalb Chrysler-Plymouth, Inc. does not warrant repairs for any cause, if any, to said car by virtue of accident or mechanical failure.' (Emphasis supplied.) The latter language shows clearly that the expression 'sold as is' applies only to used cars upon which past repairs to the car by virtue of accident or mechanical failure have been made. Looking to the back of the form, labeled 'conditions', we find provisions, some applicable to used cars and some applicable to new cars.

Paragraph 7 of these conditions states: 'No warranties are made or will be deemed to have been made by either the dealer or the manufacturer of the new motor vehicle or motor vehicle chassis furnished hereunder, excepting only Chrysler Corporation's current printed warranty applicable to such vehicle or vehicle chassis, which warranty is incorporated herein and made a part hereof and a copy of which will be delivered to purchaser at the time of delivery of the new motor vehicle or motor vehicle chassis. Such warranty shall be expressly in lieu of any other warranty, expressed or implied, including, but not limited to any implied warranty of merchantability or fitness for a particular purpose, and the remedies set forth in such warranty will be the only remedies available to any person with respect to such new motor vehicle or motor vehicle chassis.' However, this paragraph is written in the same size and color type as all the other paragraphs of the 'conditions' on the back of the form. Therefore, while this was sufficient to exclude any express warranties on the part of the dealer, it fails completely to comply with Code § 109A-2-316 for excluding the warranties implied by law in Code § 109A-2-314. There was no error in charging the jury on implied warranties as to DeKalb Chrysler-Plymouth, Inc.

The dealer contends, however, that the clause limiting the manufacturer's liability to express warranty (referred to in No. 7 of 'conditions' on the order form), which stated that 'neither Chrysler Corporation nor Chrysler Motors Corporation, nor the authorized selling dealer assumes any other obligation or responsibility with respect to the condition of the vehicle . . .' was sufficient to relieve the dealer from any implied warranties. It must be noted that this manufacturer's warranty containing this language was delivered to the purchaser at the time of delivery of the purchased automobile, as provided in No. 7 of conditions on the order, and after the purchaser had, by signing the order, obligated himself to purchase the automobile. To hold him bound by such language in the manufacturer's warranty delivered after he was obligated to purchase the automobile and when he, at the moment of delivery, had a warranty implied by law from the dealer under the very document which bound him to make the purchase, would, in our opinion, be contrary to provisions of Code § 109A-2-302, which contains provisions against unconscionable contracts or clauses in contracts. This section reads as follows: '(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (2) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.'

Further, the language in this exclusion...