Clark v. Ford Motor Co.

Decision Date09 June 1980
Docket NumberNo. 78-1228,78-1228
Citation612 P.2d 316,46 Or.App. 521
Parties, 29 UCC Rep.Serv. 1294 Joseph A. CLARK, Appellant, v. FORD MOTOR COMPANY, a Delaware Corporation, and Beaty Ford-Mercury, Inc., an Oregon Corporation, Respondents. ; CA 15327.
CourtOregon Court of Appeals

Martin E. Stone, Coquille, argued the cause for appellant. With him on the briefs was Slack, Slack & Stone, Coquille.

Stuart M. Brown, Eugene, argued the cause for respondents. With him on the brief was Young, Horn, Cass & Scott, Eugene.



Plaintiff appeals from the "decree" entered in favor of both defendants in this action brought to recover the purchase price of an automobile manufactured by defendant Ford Motor Co. (Ford) and sold to plaintiff by defendant Beaty Ford-Mercury, Inc. (the dealer). We affirm as to the dealer but reverse and remand as to Ford.

Plaintiff purchased a new 1977 Ford Bronco from the dealer in August, 1977, after selecting that vehicle in the showroom. He made a cash down payment of $381 and agreed in an installment sales contract with the dealer to pay the balance, with interest, in 48 monthly payments of $170.38.

As part of the sales transaction plaintiff received an express warranty which provided that Ford would repair or replace free any parts found to be defective within the first 12 months or 12,000 miles. The warranty of merchantability was limited to the same 12 month/12,000 mile duration. 1 Plaintiff also signed a document entitled "Disclaimer Form" which identified the Bronco being sold and stated:

"Any warranties on the vehicle sold hereby are those made by the manufacturer. The seller, Beaty Ford Merc, hereby expressly disclaims all warranties, either express or implied, including all implied warranties of merchantability or fitness for the particular purpose, and Beaty Ford Merc neither assumes nor authorizes any other person to assume for it any liability in connection with the sale of the vehicle described hereon."

The day he took possession of the vehicle plaintiff noted that the radio antenna appeared to be missing and, in searching for it, found sandy, foreign matter underneath the paint on part of the vehicle. He also observed that water was leaking onto the carpet in the front of the Bronco. Upon returning the Bronco to the dealer the paint was repaired and an antenna provided. The door was adjusted to prevent water leakage but that adjustment caused it to fit improperly and to bulge out from the body somewhat.

Shortly thereafter more foreign matter was discovered in the paint and the Bronco was returned for a complete repainting. About a week after the vehicle was repainted plaintiff noticed rust stains bleeding through the paint. The Ford factory representative was contacted and attempts were made to discover a remedy for the rust problem. It was discovered that the rust was in many of the seams of the Bronco, including those around the top molding, hood, tailgate, windshield and interior. Plaintiff and the factory representative were told by two different paint shops that repainting would not stop the rust because it was in the seams; neither shop would guarantee a new paint job. It was suggested that the only way to stop the rust would be to disassemble the body, dip the parts in a chemical solution, and then repaint it a process estimated to cost over $2,000.

Although he had been told that sandblasting and repainting would not cure the rust problem, plaintiff agreed to the suggestion of the factory representative that the sandblasting procedure be tried. The Bronco was taken on June 6, 1978, to the shop which was to do the work, but before the work was commenced, Ford decided that it would authorize only spot touch-ups of the rust stains, but not the sandblasting.

Plaintiff made his monthly contract payments through July, 1978. Shortly before the warranty from Ford was to expire he contacted an attorney and, in early August, demanded from the dealer the return of the money he had paid. The money was not returned.

The Bronco remained at the repair shop, where it had been taken in June, until September, 1978, when the dealer asked plaintiff to bring it in again for an estimate of the damage. Plaintiff returned the Bronco to the dealer, where it remained. This action was filed in October, 1978. The dealer later formally repossessed the Bronco, and resold it in May, 1979.

In this action plaintiff seeks rescission of the installment sales contract and the return of his down payment and monthly payments, totalling $2,255.18. He invokes the Uniform Commercial Code remedy of revocation of acceptance, codified in ORS 72.6080, and also seeks return of his money under the Oregon Consumer Warranty statutes, ORS 72.8010-72.8200. 2

At the outset, we are confronted with the question of our scope of review. Plaintiff contends that the action is one for rescission and that the action was apparently treated as an equitable proceeding below; therefore, our review is de novo. Defendants argue that our review is one for substantial evidence only, because the action is at law. We need not decide that question with respect to the revocation of acceptance claim under ORS 72.6080 3 because we conclude that plaintiff did not bring himself within its provisions as a matter of law. Plaintiff's claim under ORS 72.8010-72.8200 is strictly a statutory remedy, and in the absence of a specific statutory provision so providing, we do not treat our review as de novo. 4

The trial court concluded as a matter of law that plaintiff may not recover from either defendant on a revocation of acceptance theory. We agree. Plaintiff did not buy the Bronco directly from Ford and there is no evidence that the dealer was acting as Ford's agent in making the sale. A buyer may revoke acceptance only as to his seller. Voytovich v. Bangor Punta Operations, Inc., 494 F.2d 1208 (6th Cir. 1974); Volvo of America Corp. v. Wells, 551 S.W.2d 826 (Ky.App.1977); Conte v. Dwan Lincoln-Mercury, Inc., 172 Conn. 112, 374 A.2d 144 (1976); but see Durfee v. Rod Baxter Imports, Inc., Minn., 262 N.W.2d 349 (1977) (seller had gone out of business and warrantor who was not seller held liable for revocation of acceptance.) "Seller" is defined as "a person who sells or contracts to sell goods." ORS 72.1030(1)(e). Ford did not sell or contract to sell to plaintiff; therefore, plaintiff may not revoke acceptance as to Ford.

As to the dealer, we focus on what is required under its contract with plaintiff. The first requirement under ORS 72.6080 is a "nonconformity" in the goods received. Under ORS 72.1060(2)

"Goods * * * are 'conforming' or conform to the contract when they are in accordance with the obligations under the contract."

Plaintiff testified that he selected the Bronco which he bought in the dealer's showroom. The contract was for the sale of that particular Bronco. The dealer disclaimed all warranties on the Bronco. 5 The contract required that the dealer deliver that particular Bronco to plaintiff 6 and that was done. It cannot be said, therefore, that the vehicle did not conform to the requirements of the contract between plaintiff and the dealer. In this situation plaintiff may not revoke his acceptance as to the dealer.

The Consumer Warranty Act, ORS 72.8010 et seq., 7 however, provides additional protection for purchasers of consumer goods 8 beyond that provided by the Uniform Commercial Code as enacted in this state. It creates implied warranties of merchantability and fitness for use from manufacturers to consumers. ORS 72.8020, 72.8030. It requires that manufacturers who make express warranties either maintain repair facilities in the state or be subject to having the retailer service or repair the nonconforming goods, with recourse against the manufacturer.

Under the statutory scheme the consumer looks to the retailer only if the manufacturer fails to maintain adequate service facilities in the state. ORS 72.8110. The record contains no evidence that Ford did not maintain adequate service facilities in the state: both defendants contend the dealer was such a facility. Therefore, the dealer is not liable to plaintiff under that statute.

The key section of the statute for our purposes is ORS 72.8100(4):

"If the manufacturer is unable to service or repair the good in compliance with each applicable warranty, the manufacturer shall either replace the good or reimburse the buyer in an amount equal to the purchase price paid by the buyer less a reasonable charge for beneficial use by the buyer and damage, if any, to the good. In the event of replacement of the good or refunding of the purchase price, the buyer shall return the defective good to the warrantor free and clear of liens and encumbrances."

The record shows the Bronco to have been a consumer good and that Ford was unwilling or unable to resolve the rust problem. Ford argues, however, that it offered to replace the Bronco and that it has the option to choose whether to replace or refund plaintiff's money. Assuming, without deciding, that Ford has that option, the record shows that no offer to replace was ever made. The factory representative who dealt with plaintiff testified that he had no authority to offer plaintiff a replacement, but that he had suggested to Tom Beaty, president of defendant dealer, that he sell plaintiff a new Bronco (which plaintiff did not want) or make an equitable trade. The factory representative testified that he could not participate beyond that. Mr. Beaty testified that he had no recollection of that suggestion. It is clear that Ford made no offer to replace the Bronco.

Ford contends, nevertheless, that plaintiff is not in a position to return the Bronco as required by the statute because the vehicle was repossessed by the dealer and sold. We conclude, however, that the dealer was Ford's agent at least for...

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