Cober v. Corle

• Decision Date: 04 June 1992
• Citation: 610 A.2d 1036,416 Pa.Super. 191
• Parties: , 18 UCC Rep.Serv.2d 1041 Robert D. COBER, Jr. v. Johnny J. CORLE, t/a Corle Construction, Central Glass Insulations, Inc., and Sharon Metal Products, Inc., Appeal of Johnny J. CORLE, t/a Corle Construction, Appellants.
• Court: Pennsylvania Superior Court

Page 1036

610 A.2d 1036

416 Pa.Super. 191, 18 UCC Rep.Serv.2d 1041

Robert D. COBER, Jr. v. Johnny J. CORLE, t/a Corle Construction, Central Glass

Insulations, Inc., and Sharon Metal Products,

Inc., Appeal of Johnny J. CORLE, t/a

Corle Construction, Appellants.

Superior Court of Pennsylvania.

Submitted Sept. 9, 1991.

Filed June 4, 1992.

Richard T. Williams, Sr., Johnstown, for appellants.

John J. DiRienzo, Jr., Somerset, for appellee.

Before ROWLEY, President Judge, and CAVANAUGH and BECK, JJ.

BECK, Judge:

This is an appeal from a judgment entered in favor of appellee, Robert D. Cober, Jr., and against appellant, Johnny J. Corle, t/a Corle Construction, after a trial without a jury. Appellant raises two issues on appeal. First, he asserts the trial court erred as a matter of law in applying the Uniform Commercial Code warranty provisions to this case. Second, he asserts that the trial court applied an improper measure of damages.

We find no error in the trial court's disposition of this matter and affirm.

Appellee Robert Cober is engaged in the business of engine rebuilding. In early 1982, he determined that he needed a new building in which to conduct his business. On June 2, 1982, Cober entered into a written agreement with appellant Johnny Corle, a distributor and erector of pre-designed and pre-engineered steel buildings manufactured by Sharon Metal Buildings, pursuant to which Corle agreed to sell and erect a Sharon Metal steel building for Cober. The agreement was entitled "Purchase Agreement". On page one, the Agreement listed the items to be sold to Cober, including the steel building, doors, windows, concrete floor and insulation for the walls and roof. It also listed "Building Construction." There was no itemization of costs, the total price simply being indicated to be $55,500. The second page of the Agreement provided for an initial down payment of $5,500, a second payment of $35,000 and a final payment of $15,000. The third page of the Agreement is headed "Offer to Purchase" and is a more detailed listing of the various elements of the building and accessories to it which were to be sold under the Agreement. It also provided that delivery of the items indicated was dependent on availability and that the costs thereof might increase prior to delivery.

Finally, the last page of the Agreement contained a variety of general terms and conditions. Throughout this part of the document, the parties are referred to as "Buyer" and "Seller". The terms set forth relate to allocation of the risk of loss to the goods during transit, handling of claims for shortages, defects in the materials, transfer of title thereto, delay in performance by Seller, acceptance of delivery by Buyer, cancellation of the order either prior to or during fabrication and manner of payment.

Erection of the building was commenced in September 1982 and took only about four to six weeks to complete. Corle erected the building and installed the insulation in the roof and side walls. He did not participate in any other aspect of the preparation of the building for actual use. Cober independently arranged for installation of the heating, plumbing and electrical systems.

On November 20, 1987, Cober filed a complaint against Corle in which he alleged that commencing in the winter of 1982-83 and in each succeeding winter, excess condensation had formed on the ceiling and interiors of the walls of the building, to the extent that the water was dripping down into the work area. ¹ The complaint contained four counts, asserting breach of contract and breaches of express warranty, warranty of merchantability and warranty of fitness for a particular purpose. As to the latter warranty, Cober alleged that he had communicated to Corle prior to signing the Agreement that Cober wanted effective insulation to minimize heating costs and was particularly concerned with avoiding a problem with condensation in the building. He further alleged that he had relied on Corle's expertise in providing a building and insulation package that would be free of such problems.

Trial without a jury resulted in a verdict for Cober. The court found a breach of all of the warranties pleaded in the complaint. The court awarded damages in the amount of $38,581.35, the amount sought by Cober to repair the damage to the building by removing the roof and installing new insulation with a vapor barrier to prevent further seepage of moisture into the insulation and to remedy all other condensation problems in the building. Post-trial motions filed by Corle were denied and judgment for Cober was thereupon entered in the amount of the verdict. This timely appeal followed.

Appellant Corle argues that the trial court erred in refusing to grant judgment n.o.v. Our Supreme Court has very recently provided us with the following reiteration of the standards by which our review of a motion for judgment n.o.v. must be guided:

In reviewing a motion for judgment n.o.v., "the evidence must be considered in the light most favorable to the verdict winner, and he must be given the benefit of every reasonable inference of fact arising therefrom, and any conflict in the evidence must be resolved in his favor." Broxie v. Household Finance Company, 472 Pa. 373, 380, 372 A.2d 741, 745 (1977). See also, Metts v. Griglak, 438 Pa. 392, 264 A.2d 684 (1970) and Gonzalez v. United States Steel Corp., 484 Pa. 277, 398 A.2d 1378 (1979). Moreover, [a] judgment n.o.v. should only be entered in a clear case and any doubts must be resolved in favor of the verdict winner. See Atkins v. Urban Redevelopment Authority of Pittsburgh, 489 Pa. 344, 414 A.2d 100 (1980) and Steward v. Chernicky, 439 Pa. 43, 266 A.2d 259 (1970). ....

There are two bases upon which a judgment n.o.v. can be entered: one, the movant is entitled to judgment as a matter of law, Tremaine v. H.K. Mulford Co., 317 Pa. 97, 176 A. 212 (1935), and/or two, the evidence was such that no two reasonable minds could disagree that the outcome should have been rendered in favor of the movant, Cummings v. Nazareth Borough, 427 Pa. 14, 233 A.2d 874 (1967). With the first a court reviews the record and concludes that even with all factual inferences decided adverse to the movant the law nonetheless requires a verdict in his favor, whereas with the second the court reviews the evidentiary record and concludes that the evidence was such that a verdict for the movant was beyond peradventure.

Moure v. Raeuchle, 529 Pa. 394, ---- - ----, 604 A.2d 1003, 1007 (1992).

Here, appellant asserts two errors of law which he argues require a verdict in his favor. First, he argues that there were no warranties extended as to this building or its insulation except those contained in the Agreement, which did not include any warranty of fitness for a particular purpose or of merchantability. ² Corle contends the trial court should not have applied the Uniform Commercial Code to imply a warranty of fitness for a particular purpose or a warranty of merchantability into the Agreement. The basis for this contention is Corle's characterization of this transaction as an agreement for the construction of a building to which the UCC would not apply, rather than as a sale of goods to which the UCC would apply. ³

The scope of applicability of Article 2 of the Uniform Commercial Code has recently been stated as follows:

Section 2102 restricts the scope and applicability of Article II of the Uniform Commercial Code (including the implied warranty provisions of Sections 2314 and 2315 ...), to cases involving "transactions in goods." 13 Pa.C.S.A. § 2102. (Emphasis added). "Goods" are defined as "all things .. which are movable at the time of identification to the contract for sale other than money in which the price is to be paid, investment securities ..., and things in actions." 13 Pa.C.S.A. § 2105. Thus, in order to be a "transaction in goods," the subject matter of the transaction--the putative good--must be tangible and movable.

....

[However] [w]hen the transaction involves predominantly the rendition of services, the fact that tangible movable goods may be involved in the performance of services does not bring the contract under the Code.

Whitmer v. The Bell Telephone Co. of Pa., 361 Pa.Super. 282, 288, 522 A.2d 584, 587 (1987).

Corle argues that although the instant Agreement did incidentally call for the sale of the steel building and the component parts thereof, this was merely incidental to the construction "services" aspect of the Agreement. We disagree. We follow the analysis pursued by this court in York Heating Co. v. Flannery, 87 Pa.Super. 19 (1926), where the court was faced with a similar issue under the now repealed Sales Act, the precursor to the UCC. In York, the contract at issue provided for the furnishing and erection of a new heating system for an existing building. The court sought to determine whether the implied warranty of fitness for a particular purpose provided under the Sales Act applied to this transaction. The court stated the applicable test as follows:

Where a dealer sells a machine or similar apparatus and the setting up or installation is but incidental to the sale ... the Sales Act applies; but where as here the contract is really a building or construction agreement and the furnishing of material and apparatus is merely an incident thereto, the Sales Act has no application.

Id. at 24.

In applying this test to the facts before it, the York court appeared to focus its attention on the terms of the contract itself. The court noted, for example, that the contract included all the customary terms found in construction agreements, such as those requiring compliance with plans and specifications, diligent prosecution of the work, retention of the right of the owner to employ additional labor on default of the builder, and requiring supervision of the project by an architect. The court also emphasized that the builder had taken...