Collins Radio Co. of Dallas, Tex. v. Bell, 51237

• Decision Date: 07 October 1980
• Docket Number: No. 1,No. 51237,51237,1
• Citation: 1980 OK CIV APP 57,623 P.2d 1039
• Parties: 1980 OK CIV APP 57, 31 UCC Rep.Serv. 58 COLLINS RADIO COMPANY OF DALLAS, TEXAS, a division of Rockwell International, Appellant and Cross-Appellee, v. R. B. BELL and Bernice Bell, d/b/a LeFlore County Broadcasting Company, Appellees and Counter-Appellants, v. Zelman GARNER d/b/a Garner Electric Company, and John Shideler, Appellees as to Cross-Appeal only
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

Page 1039

623 P.2d 1039

1980 OK CIV APP 57, 31 UCC Rep.Serv. 58

COLLINS RADIO COMPANY OF DALLAS, TEXAS, a division of

Rockwell International, Appellant and Cross-Appellee, v. R. B. BELL and Bernice Bell, d/b/a LeFlore County

Broadcasting Company, Appellees and Counter-Appellants, v. Zelman GARNER d/b/a Garner Electric Company, and John

Shideler, Appellees as to Cross-Appeal only.

No. 51237.

Court of Appeals of Oklahoma, Division No. 1.

Oct. 7, 1980.

Rehearing Denied Dec. 16, 1980.

Certiorari Denied Feb. 2, 1981.

Released for Publication by Order of Court of Appeals Feb. 5, 1981.

Mandate Recalled Feb. 23, 1981.

Appeal from the District Court of LeFlore County, Pat Pate, Judge.

REVERSED IN PART; AFFIRMED IN PART.

Crowe, Dunlevy, Thweatt, Swinford, Johnson & Burdick by Clyde A. Muchmore, Oklahoma City, for appellant and cross-appellee.

Benjamin J. Curtis, Poteau, for appellees and counter-appellants.

Alpheus Varner, Poteau, for appellees as to cross-appeal only.

Cooper, Stewart & Elder by B. J. Cooper, Oklahoma City, for amicus curiae.

ROMANG, Judge:

An appeal by Collins Radio Company of Dallas, Texas, from a jury verdict against it on the counter petition of R. B. Bell and Bernice Bell, d/b/a LeFlore County Broadcasting Company, in a breach of warranty action based upon a written contract allegedly enlarged by oral agreements. Bell has counter appealed against Collins and has separately appealed from a jury verdict for Zelman Garner, d/b/a Garner Electric Company, who was a third party defendant in this action.

The controversy between Bell and Collins arose out of the sale of certain pieces of FM radio transmitting equipment by Collins to Bell under a written sales contract. Bell accepted the equipment, made a down payment on it, and used it for over two years, but never paid the balance due. Collins sued Bell to recover the purchase price. Bell counterclaimed against Collins alleging that the written contract did not encompass the entire agreement of the parties. Therefore, according to Bell, Collins had breached the implied warranties of merchantability and fitness for a particular purpose under the written contract, and had also breached express oral warranties covering design, appearance, performance, dimensions, maintenance, and operation with respect to the largest piece of equipment purchased the FM transmitter. Bell sought $826,786.87 in actual damages. Additionally, Bell alleged two causes of action sounding in tort. The allegations under the second and third causes of action are less than clear, but it appears that Bell sought to impose punitive damages against Collins upon allegations that certain actions of Collins were wilfull and malicious, causing damage to the professional reputation of Bell, and that these same actions were calculated to injure Bell in the pursuance of his occupation.

Bell made Zelman Garner, d/b/a Garner Electric Company, a third party defendant. Under a written contract between these two parties Garner was to construct the facility that was to house the FM equipment, install heating and air-conditioning, install some of the transmitting equipment, and provide a phaseconverter. The allegations of Bell's position against Garner were that he had not done the work in a workmanlike manner and had breached implied and express warranties under the sales contract for the phaseconverter. A major issue below and on appeal is whether the phaseconverter referred to throughout the trial by its brand name, Rotoverter was a cause of transmitter failure. The Rotoverter was necessary because Bell had available only one-phase electricity, whereas FM transmitters utilize three-phase electricity. Its function was to convert the one-phase to three-phase electricity.

For the FM station to broadcast continuously during its air time, it was imperative that Collins' transmitter and the Rotoverter work together. They did not, and the result was that the station experienced considerable amounts of downtime. Several other factors are present, but the downtime is the major basis for Bell's alleged damages against both Collins and Garner.

At the close of all evidence the trial court entered a directed verdict for Collins for the purchase price of the equipment, $64,788.03. The jury returned a verdict against Collins on Bell's first cause of action for $200,000.00, but found against Bell and for Collins on Bell's second and third causes of action, those sounding in tort. The jury returned a verdict for Garner on Bell's action against him.

Bell successfully sought a writ of mandamus in the Supreme Court. Thereunder, the Court, pursuant to 12 O.S. 1971, § 699, directed the trial court to grant Bell a judgment against Collins for the excess of their award over the judgment for Collins. The amount of this judgment is challenged on appeal, but we need not address this issue because of our disposition of the case.

Both Collins and Bell appealed. By order of the Supreme Court the Collins appeal was designated as the principal appeal, and Bell's appeal was designated as the counter appeal. Bell also appealed from the jury verdict for Garner.

There are three sets of parties to this appeal. We address the issues with respect to these parties separately.

I. Bell v. Garner

The jury was properly instructed as to the causes of actions that Bell had alleged against Garner. Upon conflicting evidence the jury found that Garner had not breached any warranties under the contract or performed any work in an unworkmanlike manner. A review of the voluminous record reveals that there was competent evidence to support the verdict, therefore it is affirmed. Hames v. Anderson, 571 P.2d 831, 833.

II. Collins v. Bell

The trial court directed a verdict for the purchase price of the equipment on Collins' petition and evidence. In a later hearing Collins was granted attorney's fees. Although Bell alleged that the directed verdict was contrary to the law, and not sustained by the evidence, and that the attorney's fee was excessive, he failed to brief or argue these assertions on appeal. The assertions are therefore deemed waived and will not be considered by this Court. Higdon v. Henderson, 304 P.2d 1001, 1002. The directed verdict for Collins and the attorney's fee awarded stand.

III. Bell v. Collins

Collins at the close of all evidence moved for a directed verdict as to the two tort theories and the breach of warranty theory. The trial court overruled the motion, and the three causes of action against Collins were submitted to the jury. Bell does not challenge the jury verdict for Collins on the two tort causes of action. Greene v. Circle Ins. Co., 557 P.2d 422, 423; Mills v. Lester, 169 Okl. 344, 37 P.2d 261, 262. The two tort theories are not before us.

On the breach of warranty action against Collins, we have carefully reviewed the entire record and find for reasons set out in the remainder of this opinion that there is no evidence reasonably supporting the judgment and verdict. We therefore reverse that judgment. Green v. Safeway Stores, Inc., 541 P.2d 200, 203.

We begin by addressing two questions of law determined by the court and affecting the causes of actions allowed to go to the jury against Collins.

A. Choice of Law

Bell asserted below that the sales contract was a Texas contract and that the substantive law of Texas was therefore the proper law to apply to determine the rights and liabilities of the parties. The trial court determined that Oklahoma law applied. Bell argues that 15 O.S. 1971, § 162 controls this determination. Section 162 is the general statute for choice of law to be applied in determining the validity of a contract. Bell also argues that the sale of the transmitter was a "sale of goods," making it a commercial transaction covered by the Uniform Commercial Code. This is a correct assertion, and one with which Collins and this Court agree. Because this is a sale of goods, the rights and liabilities of the parties are specifically governed by Article 2 of the Code, but the general provisions of Article 1 are applicable to all the other Articles. Both Texas and Oklahoma have adopted the Code provisions of Articles 1 and 2. Tex.Bus. & Com.Code Ann. tit. 1, §§ 1.101 to 2.725 (Vernon 1968); 12A O.S. 1971, §§ 1-101 to 2-725 (hereinafter cited by U.C.C. section number only). The Code provides its own choice of law rule in section 1-105. The Texas statute is identical to the Oklahoma statute. Just as the Oklahoma Supreme Court found in Sesow v. Swearingen, 552 P.2d 705, 706-07, that when a sale of goods is involved the statute of limitation in § 2-725 supersedes the general statute of limitations, 12 O.S. 1971, § 95 (Second), we find that the choice of law rule in section 1-105 supersedes the general contract choice of law rule found at 15 O.S. 1971, § 162.

The Oklahoma Supreme Court has not had an opportunity to interpret section 1-105(1). But see Williams v. Texas Kenworth Co., 307 F.Supp. 748, 753 (W.D.Okla.1969). The statute allows the parties to agree to apply the law of a state that bears a reasonable relationship to the transaction. Absent such an agreement the statute's directive is that "this Act applies to transactions bearing an appropriate relationship to this state." (Emphasis added.)

Thus, the threshold question becomes what relation is appropriate. Comments 2 and 3 to section 1-105 offer some guidance:

2. Where there is no agreement as to the governing law, the Act is applicable to any transaction having an "appropriate" relation to any state which enacts it. Of course the Act applies to any transaction which takes place in its entirety in a state which has enacted the Act. But the mere fact that suit is brought in a state does not make it appropriate to apply the substantive law of that state. Cases where a relation to the enacting state is not "appropriate" include, for example, those where the parties have clearly contracted on the basis of some other law, as where...