Dorcal, Inc. v. Xerox Corp.

• Decision Date: 24 April 1981
• Citation: 398 So.2d 665
• Parties: DORCAL, INC., an Alabama Corporation v. XEROX CORPORATION et al. 79-777.
• Court: Alabama Supreme Court

Page 665

398 So.2d 665

DORCAL, INC., an Alabama Corporation v. XEROX CORPORATION et al.

79-777.

Supreme Court of Alabama.

April 24, 1981.

Rehearing Denied May 22, 1981.

Clement J. Cartron, III, of Cartron & Pearson, Huntsville, for appellant.

John O. Cates of Ford, Caldwell, Ford & Payne, Huntsville, for appellees.

BEATTY, Justice.

Appellant Dorcal, Inc. appeals from a lower court judgment finding that appellee Xerox Corporation was not guilty of fraud and deceit in the leasing of one Xerox 6500 color copier. We affirm.

I.

On July 6, 1977, appellant Dorcal, Inc., a graphics design business specializing in commercial advertising and technical artwork, entered into an agreement with appellee Xerox Corporation for the leasing of one Xerox 6500 color copier. Prior to entering this agreement, the principal owners of Dorcal, Dorothy Babb and Carol Frances Allen, were contacted by Butch Patrick, a regional sales representative for Xerox, concerning the availability of the 6500 color copier. At that time, Mrs. Babb and Mrs. Allen had not yet formed Dorcal and were merely in the preliminary stages of establishing their graphics design company. When contacted by Mr. Patrick, they were informed that the Xerox 6500 color copier was a "damn good machine" with multiple applications in their line of work. In addition, Mr. Patrick provided them with a brochure which represented that the 6500 color copier was displacing traditional color processes by providing a rapid, high-quality means of color reproduction. The brochure also delineated various innovative uses of the 6500 color copier in other specialized fields. For example, the brochure represented that the color copier was used by a federal agency to record the progress of tree diseases by making direct color copies of leaves; by a pharmaceutical firm to make color copies of microdilution plates for lab records; by hospitals to make color enlargements of 35mm color slides of vascular pathology and histology specimens for diagnostic and training purposes; by a prominent jewelry manufacturer to prepare immediate catalog papers by copying actual pieces of jewelry and catalog information on the same sheet; and by a fashion design firm to prepare original designs for softgoods, drapery, floor covering and wallpaper manufacturers. On the basis of these representations, Mrs. Babb and Mrs. Allen, then operating under the informal name of BaCall Graphics, contracted to lease a Xerox 6500 color copier for one year. When their business was subsequently incorporated under the name Dorcal, Inc., this lease agreement became binding on appellant Dorcal.

Under the terms of the lease agreement, Xerox was responsible for servicing the machine while Dorcal was responsible for "general maintenance." In addition, Dorcal agreed to pay a minimum monthly rental charge and certain other specified charges for equipment placement or removal, equipment transportation, accessories and supplies.

Although Dorcal ordered the 6500 color copier for delivery on August 1, 1977, the copier was not delivered and installed until September 29, 1977. From that time until the middle of December 1977, Dorcal experienced only minor problems with the copier and was completely satisfied with the quality of its color reproductions; however, from mid-December 1977 until it ceased using the machine on May 24, 1978, Dorcal encountered repeated difficulties with the operation of the machine. Dorcal became increasingly displeased with the functioning of the color copier, frequently complaining of the appearance of magenta streaks and cyan spots on its color copies. In addition, Dorcal complained of the copier's inability to reproduce certain specific colors and half tones.

In an effort to alleviate these difficulties, Dorcal contacted various representatives of Xerox and requested that the copier either be repaired or replaced. As a result of these requests, Xerox made numerous service calls and had several technical representatives inspect the machine. The frequency of these service calls and inspections, as recorded by Dorcal, varied from every two to fourteen days, with approximately twenty service calls being made over the four-months period extending from February 1st to May 24th, 1978. When Dorcal was never able to achieve a satisfactory servicing of the machine, it ceased using the copier on May 24, 1978.

On September 21, 1978, Dorcal filed a complaint in the Circuit Court of Madison County seeking damages against Xerox for pecuniary injuries allegedly sustained in the leasing of the Xerox 6500 color copier. Specifically, Dorcal sought damages for breach of express warranty, breach of implied warranty, fraud by misrepresentation, fraud by suppression of a material fact, fraud by intentional deceit, willful deceit with intent to induce Dorcal to alter its position, and breach of the lease agreement. Dorcal demanded judgment in the amount of $150,000 for loss of income; loss of extensive advertising expenses; loss of good will and business reputation; loss of current and prospective accounts; and loss of considerable supplies and labor.

In response to Dorcal's complaint, Xerox filed a motion to dismiss which was overruled by the trial court on October 20, 1978. Xerox did not file its answer to the complaint until December 21, 1978, ninety-one days after the filing of the complaint and sixty-two days after the trial court overruled the motion to dismiss. In its answer Xerox entered both general and specific denials and asserted the defense of contributory negligence. In addition, Xerox asserted a compulsory counterclaim seeking damages from Dorcal for breach of the lease agreement and for failure to pay certain fees and charges incurred under the terms of that agreement.

No additional pleadings were filed by the parties until September 18, 1979 when Dorcal filed its answer to Xerox's counterclaim. Prior to that time, on March 27, 1979, Dorcal filed a demand for a jury trial pursuant to Rule 38(b), ARCP. On September 10, 1979, the trial court granted Xerox's motion to strike the demand as being untimely filed. Dorcal again asserted its demand for a jury trial on November 2, 1979 by filing a motion requesting the trial court to reconsider its decision of September 10th. That motion was overruled by the trial court and the cause proceeded to trial with the trial court hearing evidence ore tenus.

At trial Dorcal offered, among other things, the testimony of seven different customers who contracted with Dorcal for color reproduction services. As a general rule, these individuals testified concerning the poor quality of the color copies produced by the 6500 color copier and the unacceptability of these copies for business purposes. Several of these witnesses also testified as to letters they had written to Dorcal expressing their intent to take their business elsewhere in the future. Dorcal also offered the testimony of Paul Putman, a certified public accountant, who conducted a ratio analysis of Dorcal's business records to determine the extent of lost revenues resulting from the inoperability of the color copier. On the basis of his calculation, which he admitted were purely subjective, Mr. Putman estimated that Dorcal lost revenues in the amount of $17,152.58.

In rebuttal, Xerox presented the testimony of several technical representatives who dealt with Dorcal. Each of these individuals had inspected or serviced the machine on some prior occasion. Each testified that, in their opinion, the color copier was functioning normally at the time they inspected it. In addition, Rebecca Farmer (a color analyst), Ronald D. Ivey (a senior technical representative) and Richard Hamiter (a service technician) individually testified that the major difficulty with the machine appeared to result from Dorcal's constant adjustment of the machine to achieve specific colors. Ms. Farmer stated that, in her opinion, Dorcal's expectations as to the machine's capabilities were much too high.

On June 30, 1980, the trial court entered its final judgment stating that it was of the opinion that neither party was entitled to recover from the other. It, therefore, found in favor of Xerox on Dorcal's complaint and in favor of Dorcal on Xerox's counterclaim. Dorcal now appeals.

II.

The fundamental issue concerns the trial court's action in striking Dorcal's demand for a jury trial. At the very outset, we recognize the intention of the Alabama Rules of Civil Procedure that nothing abridge the fundamental right to a jury trial as declared by our Constitution and by statute. Rule 38(a), ARCP; Mobley v. Moore, Ala., 350 So.2d 414 (1977). However, Rule 38(d), ARCP provides in clear and unambiguous terms that "(t)he failure of a party to serve a demand as required by this rule and to file it as required by Rule 5(d) constitutes a waiver by him of trial by jury." The formal requisites of this demand are delineated in 38(b) as follows:

Any party may demand a trial by jury of any issue triable of right by a jury by serving upon the other parties a demand therefor in writing at any time after the commencement of the action and not later than 30 days after the service of the last pleading directed to such issue. Such demand may be indorsed upon a pleading of the party, and such demand shall be deemed to be a demand for a struck jury.

The question in this case is whether Dorcal's demand was properly filed within the time limitation established by this rule.

Dorcal contends that its initial demand for a jury trial was timely insofar as it was filed prior to service of the "last pleading" directed to the issues. As authority for this proposition, Dorcal relies heavily on the recent decision of Baggett v. Sims, Ala., 387 So.2d 792 (1980) wherein this Court held that a demand for a jury trial is effective to compel a jury trial on all issues if made within 30 days after service of a reply to a compulsory counterclaim. Dorcal argues that since...