Chutich v. Samuelson

• Decision Date: 11 December 1973
• Docket Number: No. 72--309,72--309
• Parties: Dan T. CHUTICH and Gladys M. Chutich, Plaintiffs-Appellants, v. Mike SAMUELSON et al., Defendants-Appellees and Third-Party Plaintiffs-Cross-Appellees, v. CONTINENTAL CASUALTY COMPANY, Third-Party Defendant-Appellee and Cross-Appellant. . I
• Court: Colorado Court of Appeals

Page 1363

518 P.2d 1363

33 Colo.App. 195

Dan T. CHUTICH and Gladys M. Chutich, Plaintiffs-Appellants, v. Mike SAMUELSON et al., Defendants-Appellees and Third-Party Plaintiffs-Cross-Appellees, v. CONTINENTAL CASUALTY COMPANY, Third-Party Defendant-Appellee

and Cross-Appellant.

No. 72--309.

Colorado Court of Appeals, Div. I.

Dec. 11, 1973.

Rehearing Denied Jan. 15, 1974.

Certiorari Granted March 11, 1974.

Laurence A. Ardell, Richard R. Macrorie, Pueblo, for plaintiffs-appellants.

Paul D. Renner, Denver, for defendants-appellees and third-party plaintiffs-cross-appellees.

Yegge, Hall & Evans, John R. Trigg, Denver, for third-party defendant-appellee and cross-appellant.

ENOCH, Judge.

Mr. and Mrs. Chutich sued Veterans Gas and Service, Inc., and the members of the last board of directors of Veterans for damages resulting from a propane gas explosion in plaintiffs' home. The jury returned a verdict in favor of defendants and plaintiffs appeal. A cross-appeal was filed by the third-party defendant, Continental Casualty Company, challenging the trial court's entry of summary judgment holding the company liable to defendants for costs incurred in the litigation. We shall consider each claim separately.

In 1960 Veterans Gas and Service, Inc., sold plaintiffs two gas appliances and installed them in plaintiffs' home. In connection with the installation, an underground propane tank was relocated some distance from the house and a new pipe was installed underground connecting the tank to the appliances. On July 11, 1966, plaintiffs returned from a weekend trip and discovered that their gas water heater was not functioning. When they attempted to light the pilot light, an explosion occurred which inflicted severe personal injuries on both plaintiffs.

Investigations after the explosion revealed several large holes in the black steel pipe which had been installed underground by defendants. Plaintiffs alleged that these holes in the pipe were the source of the gas which caused the explosion. Plaintiffs further alleged that the holes resulted from a chemical reaction between rainwater and ashes in the soil, and that defendants should not have laid uncoated steel pipe in soil containing ashes. The defendants offered an alternative theory of causation, contending that the explosion occurred because the fail-safe mechanism in the water heater malfunctioned, thus allowing gas to escape into plaintiffs' basement when the pilot light went out. There is no claim that defendants are responsible for the alleged malfunctioning of the failsafe valve. Defendants also presented evidence that plaintiffs were contributorily negligent or assumed the risk of injury by attempting to light the pilot light in a room where the odor of gas was present. The evidence is in conflict as to whether the Chutiches smelled gas before they attempted to light the pilot light.

I. BREACH OF IMPLIED WARRANTY

Plaintiffs' complaint stated two claims, one based on negligence in the installation of the pipe and one for breach of implied warranty arising out of the contract for sale and installation of the propane system. At the close of plaintiffs' evidence, the trial court granted defendants' motion to dismiss the breach of warranty claim on the grounds that plaintiff had not presented sufficient evidence of the contract and breach thereof by Veterans. Plaintiffs allege that the trial court erred in granting this motion. We agree.

The defendants argue that although Veterans sold certain gas appliances to plaintiffs, the service aspect of the transaction predominates. Therefore, defendants contend, no implied warrantly existed because implied warranties are limited to sales governed by statutes, such as the Uniform Sales Act (which was in force at the time this contract was executed).

We agree that plaintiffs' complaint states a claim based on the service element of the transaction. Plaintiffs contend that defendants selected the wrong type of pipe for use in soil containing ashes, not that the pipe or the appliances were defective or unfit for their intended use. Their allegation relates to the services rendered by defendants, rather than the products sold by defendants. Therefore, statutory warranties imposed by the Uniform Sales Act do not apply.

However, a sale is not the only transaction in which a warranty may be implied. Hoffman v. Misericordia Hospital, 439 Pa. 501, 267 A.2d 867; 1 S. Williston, Sales § 242(b) (rev. ed. 1948). See generally Farnsworth, Implied Warranties of Quality in Non-Sales Cases, 57 Colum.L.Rev. 653 (1957); Note, Implied Warranties in Service Contracts, 39 Notre Dame Law. 680 (1964). Whenever a person holds himself out as specially qualified to perform work, the common law implies a warranty that the task will be executed in a workmanlike manner and the result will be reasonably fit for its intended use. Aced v. Hobbs-Sesack Plumbing Co., 55 Cal.2d 573, 12 Cal.Rptr. 257, 360 P.2d 897; In re Estate of Talbott, 184 Kan. 501, 337 P.2d 986; McCool v. Hoover Equipment Co., 415 P.2d 954 (Okl.). In Colorado the common law warranty implied in service contracts has been applied most frequently to the construction of new homes. Carpenter v. Donohue, 154 Colo. 78, 388 P.2d 399; Shiffers v. Shepherd Builders Co., 28 Colo.App. 29, 470 P.2d 593. This warranty is particularly important where, as in this case, there is a substantial risk of disastrous consequences if the work is not performed carefully and the purchaser lacks the expertise needed to evaluate the quality of the workmanship or to discover defects.

Plaintiffs assert that they presented sufficient evidence of an oral contract and breach of the common law implied warranty for their case to have gone to the jury on this theory. We agree. Both Mr. Chutich and defendant Samuelson testified that Veterans agreed to install the gas appliances and relocate the propane tank for a price. Evidence was presented that the pipe installed by defendants was corroded and that the corrosion had been caused by the chemical reaction between rainwater and ashes in the soil. From this evidence it would have been reasonable for a jury to conclude that defendant had breached the implied warranty because the pipe, as installed by defendant, proved to be unfit for the use to which it was put. Although the evidence may also support a negligence theory, the inquiry in a warranty cause of action focuses on the adequacy of the final product, here the ultimate result of the services performed, rather than on the reasonableness of defendant's conduct. Thus, whether the defendants failed to inspect the soil carefully before laying the pipe and whether the defendant was aware that uncoated pipe should not be used in soils containing ashes would not be issues under the warranty theory in this case. See Aced v. Hobbs-Sesack Plumbing Co., Supra; Kuitems v. Covell, 104 Cal.App.2d 482, 231 P.2d 552; W. Prosser, Law of Torts § 95 at 636 (4th ed.). Propane gas is an inherently dangerous substance (See Grange Mutual Fire Insurance Co. v. Golden Gas Co., 133 Colo. 537, 298 P.2d 950), which justifies the application of the strict liability concept under the doctrine of common law implied warranty in service contracts.

In addition, the defenses available to the defendant and the extent of recoverable damages in a claim based on breach of warranty are not the same as in a negligence action. Contributory negligence and assumption of the risk, in the case at hand, would not be defenses on the issue of whether there had been a breach of implied warranty. The damages...