Clark v. International Harvester Co.

• Decision Date: 30 June 1978
• Docket Number: No. 12328,12328
• Parties: , 25 UCC Rep.Serv. 91 Raymond W. CLARK and Iona Clark, husband and wife, dba Clark's Custom Farming, Plaintiff-Respondent and Cross-Appellant, v. INTERNATIONAL HARVESTER COMPANY, a Delaware Corp., Defendant-Appellant and Cross-Respondent, and McVey's, Inc., an Idaho Corp., Defendant.
• Court: Idaho Supreme Court

Page 784

581 P.2d 784

99 Idaho 326, 25 UCC Rep.Serv. 91

Raymond W. CLARK and Iona Clark, husband and wife, dba Clark's Custom Farming, Plaintiff-Respondent and Cross-Appellant, v. INTERNATIONAL HARVESTER COMPANY, a Delaware Corp., Defendant-Appellant and Cross-Respondent and McVey's, Inc., an Idaho Corp., Defendant.

No. 12328.

Supreme Court of Idaho.

June 30, 1978.

Richard E. Hall and Loren Ipsen of Moffatt, Thomas, Barrett & Blanton, Boise, for defendant-appellant and cross-respondent

Randy John Stoker of Plankey, Johnson, Kvanvig & Stoker, Twin Falls, for plaintiff-respondent and cross-appellant.

BAKES, Justice.

This is a products liability case in which the plaintiffs seek to recover consequential damages for economic losses resulting from an allegedly defective tractor manufactured by defendant International Harvester Company and sold to the plaintiffs by defendant McVey's, Inc., an International Harvester Co. dealer. The plaintiffs alleged a breach of implied and express warranties and negligent design and manufacture of the tractor. Prior to trial the district court granted partial summary judgments in favor of the defendants on the warranty claims. After trial the district court, sitting without a jury, entered judgment against the defendants on the negligence claim and awarded the plaintiffs $26,950.15 in damages.

The defendant International Harvester Co. appeals from that judgment on several grounds. The plaintiffs have cross appealed from the partial summary judgments which dismissed their warranty claims.

We reverse with respect to the defendant's appeal on the negligence claims, and reverse and remand with respect to the plaintiffs' cross appeal on the denial of the warranty claims.

I

Plaintiff Raymond W. Clark is a custom farmer in the Twin Falls, Idaho, area doing business as Clark's Custom Farming. Custom farmers contract to plow or preplant (a fertilizer application) farmland and are generally compensated according to the number of acres plowed or preplanted. They generally work intensive 10 to 15 hour work days, but work only during the spring and fall. In the spring of 1972 Clark first engaged in the custom farming business in the Twin Falls area, although he previously had been in the custom farming business in California.

On January 7, 1972, Clark purchased a Model 1466 International Harvester turbodiesel tractor from McVey's, Inc. Clark took delivery of the tractor on January 28 Early in the fall of 1973, more than a year and a half after he had purchased the tractor, Clark noticed a loss of power in the tractor while preplanting a field covered with potato vines, weeds and other debris. The debris in the field piled up in front of the shanks of the preplant applicator, rather than feeding back through the shanks of the applicator. Preplanting was impossible under these conditions. Clark believed this problem was caused by the inability of the tractor to pull the applicator with sufficient speed to vibrate the shanks of the applicator and thereby cause the debris to feed back through the shanks. McVey's tested the tractor on a dynamometer, a device for testing the horsepower of a tractor at the power takeoff (PTO) shaft. That test revealed no significant loss of horsepower at the PTO shaft.

1972, The transmission of this tractor was equipped with a "torque amplifier" (TA). When the tractor is driven in the TA mode, as opposed to the direct or normal drive mode, the tractor develops more torque, or pulling power, at a sacrifice of speed. Clark began using the tractor in his custom farming business in March, 1972. However, between April, 1972, and May, 1973, several breakdowns because of bent or broken push rods in the engine occurred. After each breakdown, McVey's repaired the tractor free of charge under the warranty. Because of these breakdowns Clark alleged he lost 111/2 days of work.

Nonetheless, Clark believed the tractor was not pulling properly and concluded that the tractor was not able to plow a sufficient number of acres per hour for it to be economically practical to operate the tractor that season. Clark investigated the possibility of renting a substitute tractor for the 1973 fall season, but determined that it would be too expensive. With the exception of the first fall plowing job during which he experienced the loss of power, Clark did not do any custom farming with the tractor in the fall of 1973.

Clark testified that if the tractor had been functioning properly he would have been able to work sixty ten-hour work days that fall approximately 40 days plowing and 20 days preplanting. Earlier in 1973, Clark had signed a three year contract with United States Steel Farm Service for fertilizer application. A representative of that firm testified that his company could have supplied Clark with 60 days of work in the 1973 fall season.

Because field conditions were better in the spring of 1974, Clark was able to operate the tractor on a limited basis for 14 days, but at a slower speed than he had operated the tractor previously. At the trial Clark testified that he was only able to cover eight acres per hour when he felt he should have been able to cover twelve acres per hour.

In December of 1973, Clark, through his attorney, had contacted Dr. Rudolf Limpert, an associate research professor of mechanical engineering at the University of Utah. Dr. Limpert agreed to examine the tractor and try to diagnose the cause of the power loss. Over the next six months Dr. Limpert conducted several tests on the tractor. From these several tests Dr. Limpert concluded that something was slipping in the process of transmitting the power from the engine to the draw bar in the TA mode. Under Dr. Limpert's supervision the TA unit was disassembled at a tractor repair shop in Twin Falls, Idaho. Upon disassembly Dr. Limpert noted eccentric wear in a clutch shaft. Under Dr. Limpert's direction, the TA unit was replaced by the repair shop with parts obtained from McVey's. Dr. Limpert tested the tractor after repair and determined that it was performing satisfactorily.

Clark sued McVey's and International Harvester in October, 1974, alleging negligent design and manufacture and breach of implied and express warranties. McVey's cross claimed against International Harvester for indemnification.

The defendants separately moved for summary judgment alleging that when Clark purchased the tractor he signed a sales form which provided for a 12 month warranty and which limited the buyer's remedies to the repair or replacement of A court trial was held on the negligence claim. Defendant McVey's did not participate in the trial. ¹ Dr. Limpert, testifying as an expert witness for the plaintiffs, stated that the eccentric wear on the clutch shaft in the TA assembly permitted oil to escape between the shaft and its housing. According to Dr. Limpert, this oil leakage resulted in a decrease in the hydraulic pressure which permitted slippage between the clutch plates of the TA lockup clutch, which is hydraulically actuated, because the hydraulic pressure was then insufficient to squeeze the plates together properly. The plaintiffs also introduced evidence that the push rod failures were caused by improperly designed rocker arms and that International Harvester should have detected the problem in its inspection and products control system.

defective parts by the defendant and disclaimed all other warranties. The trial court granted the motion for summary judgment on the warranty claims but ruled that the disclaimer provisions in the form did not exclude liability for negligence.

After the plaintiffs had rested their case, the defendant moved for a dismissal on the ground that the plaintiffs had only established consequential damages and that purely consequential damages were not recoverable in negligence. The trial court denied the motion.

William R. Borghoff, a product performance engineer for International Harvester, testified about the operation of the TA assembly in Clark's tractor. According to Borghoff, the TA lockup clutch, which Dr. Limpert testified had been slipping, is a light duty clutch which prevents the tractor from coasting when driven in the TA mode, and it transmits no power from the engine to the draw bar. According to Borghoff's testimony it would be mechanically impossible for slippage in the TA lockup clutch or low hydraulic pressure to cause a loss of horsepower in the TA mode. The plaintiffs presented no rebuttal evidence concerning the function of the TA lockup clutch or the manner in which power is transmitted in the TA mode.

In a memorandum opinion the trial court found that "(p)laintiffs' consequential damages due to 'down' time in their operation were caused by design defect in the valve train of the engine and negligent manufacture or assembly in the torque amplifier, . . . Plaintiffs are entitled to recover $24,246.00 for their down time and $2,112.00 for repair of the tractor." ² The trial court denied the plaintiffs' claims for damages due to loss of "present and future" business and decreased value of the tractor. Formal findings of fact, conclusions of law and a judgment were subsequently prepared and entered. ³

The defendant International Harvester made motions (1) for an amendment of the findings of fact and conclusions of law, pursuant to I.R.C.P. 52(b), (2) for a new trial pursuant to I.R.C.P. 59(a), and (3) for an amendment of the judgment entered pursuant to I.R.C.P. 59(e). All the defendant's motions were denied.

The defendant International Harvester has appealed from the judgment of the trial court and from the denial of its post trial motions. The plaintiffs have cross appealed

from the partial summary judgments on their warranty claims.

II APPEAL OF DEFENDANT INTERNATIONAL HARVESTER

The defendant on appeal has made numerous assignments of error. They can be summarized as follows:

1. The evidence adduced at trial is insufficient to support...