Downs v. Shouse

• Decision Date: 25 September 1972
• Docket Number: CA-CIV,No. 2,2
• Citation: 18 Ariz.App. 225,501 P.2d 401
• Parties: , 11 UCC Rep.Serv. 481 Hugh L. DOWNS, Appellant, v. Robert G. SHOUSE et al., Appellees. 1164.
• Court: Arizona Court of Appeals

Page 401

501 P.2d 401

18 Ariz.App. 225, 11 UCC Rep.Serv. 481

Hugh L. DOWNS, Appellant, v. Robert G. SHOUSE et al., Appellees.

No. 2 CA-CIV 1164.

Court of Appeals of Arizona, Division 2.

Sept. 25, 1972.

D'Antonio & Videen by Garven W. Videen, Tucson, for appellant

Laber, Morrow, Lovallo & Colarich, Ltd. by Paul W. Colarich, Jr., Tucson, for appellees.

KRUCKER, Chief Judge.

This appeal arises out of the circumstances of the sale of a Piper Cherokee 235 airplane by appellant, defendant below, to appellees, plaintiffs below.

Plaintiffs initially filed a complaint in replevin, alleging Inter alia ownership of the plane and the wrongful removal of certain equipment (a radio and distance-measuring device) from the plane by the defendant. They requested recovery of possession of the equipment or damages and posted a replevin bond. No redelivery bond was delivered to the sheriff within the statutory prescribed period. Therefore, the equipment was seized by the sheriff and delivered to plaintiffs.

Defendant filed a responsive pleading and counterclaimed for $1500, allegedly owned to him as part of the purchase price of the plane. The plaintiffs filed an amended complaint and a reply to the counterclaim; defendant then filed an amended answer. The amended complaint set forth three counts. Count one reiterated the allegations of the replevin complaint; count two alleged breach of express warranty; and count three alleged breach of implied warranty.

The case was tried to the court sitting without a jury. The court entered judgment in favor of the plaintiffs and against the defendant for $138.68 for breach of warranty, ¹ and $500 compensatory and $400 punitive damages (for what must be assumed to be for the replevin count), plus plaintiffs' costs. It is from this judgment that defendant appeals.

The sequence of events viewed in a light favorable to the judgment are as follows. In December, 1969, the parties entered into negotiations for the purchase of a Piper Cherokee 235 airplane. During the course of their conversations the defendant described how the aircraft had been maintained, specifically mentioning that the oil was changed every 50 hours as recommended by the service manual. Prior to the sale, both parties agreed to have Leo Reisdorf, an airplane mechanic, check the plane. Upon his inspection of the logbook, Reisdorf recommended that the plaintiffs have a 100-hour inspection. This inspection would have entailed, among other things, a visual check of the bolts on the adaptor plate to see if they were securely fastened. Plaintiffs elected instead to have an oil change.

On December 18, 1969, in reliance upon defendant's assertions as to the airplane's mechanical condition, the plaintiffs purchased the plane for $15,500, and the defendant endorsed the F.A.A. bill of sale in blank. The purchase price was to be paid as follows: $2,000 down, $1,500 by a promissory note payable within 60 days or on demand, and the balance by paying off an Although plaintiffs had not presented the note or paid the $1,500 to defendant, and had not paid off the existing lien, on December 18 they took possession of the airplane with defendant's permission.

existing lien that defendant owed the First National Bank of Arizona.

Pursuant to a prior lease arrangement between plaintiffs and Skyliners, Inc., Co., a flying club of which plaintiffs were members of the Board of Directors, one of the club members flew the plane for 2.3 hours on December 19. On December 20, another of its members flew the plane. Prior to taking the plane out, he conducted a pre-flight inspection which revealed that there were 12 quarts of oil in the plane. After reaching 8,500 feet and discovering that the oil pressure was dropping, he turned the airplane around and headed toward the Avra Valley Airport. An examination of the plane upon landing revealed an oil leak at the oil filter adaptor plate where it was bolted to the engine, resulting in the sum of $1,628.58 being expended for repairs.

Because he had not been fully paid, the plaintiffs having refused to pay him the $1,500 because of the damage to the plane, on January 13 Downs went to the Avra Valley Airport, where the plane was hangered, and removed a radio and a distance measuring device from the aircraft. Although the plane was registered in Downs' name at the time, he had no agreement that the airplane was to be security for the unpaid purchase money. Plaintiffs expended $750 in purchasing a used radio to replace the one Downs had taken.

On appeal, defendant contends that plaintiffs were not entitled to recover damages either for breach of warranty or on the replevin count. We shall consider these contentions Seriatim. We do, however, feel constrained to point out that the posture of this case, both in the trial court and on appeal, can hardly be called a model of clarity.

BREACH OF WARRANTY

It is defendant's position that the plaintiffs had no claim for breach of implied warranty and we agree. Although it is not clear whether the court gave judgment for 'breach of warranty' upon a theory of express warranty or implied warranty, it is certain that the judgment cannot be sustained upon the latter theory. A.R.S. § 44--2331 (U.C.C. 2--314) provides in part:

'A. Unless excluded or modified (§ 44--2333), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. . . .'

A.R.S. § 44--2304 (U.C.C. 2--104) defines merchant as:

'A. 'Merchant' means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.'

Downs, not being a merchant as defined in A.R.S. § 44--2304, there can be no implied warranties attributed to him in the sale of the airplane to the plaintiffs. See, 3 Bender's U.C.C. Services, Sales & Bulk Transfers § 701(2) (a).

We are of the opinion, however, that the judgment can be sustained on the theory of express warranty. This type of warranty is created under A.R.S. § 44--2330, subsec. A, par. 1 (U.C.C. 2--313(1)(a)) when the seller represents:

'Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain. . . .'

Defendant initially contends that his description of how the airplane had been maintained did not constitute an 'affirmation Oftentimes one of the greatest difficulties in finding an express warranty is distinguishing between fact and opinion. Prior to the Code, a statement of opinion, or what has been sometimes referred to as 'puffing,' did not give rise to an express warranty. Jorgensen Co. v. Tesmer Manufacturing Co., 10 Ariz.App. 445, 459 P.2d 533 (1969). The Code has not changed that. A.R.S. § 44--2330, subsec. B is explicit on this point. It provides:

of fact' but a mere opinion and since Reisdorf advised the plaintiffs to have a 100-hour inspection, that Downs' statements as to the mechanical condition of the plane could not be the basis of the bargain.

'B. It is not necessary to the creation of an express warranty that the seller use formal words such as 'warrant' or 'guarantee' or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty.'

In distinguishing between fact and opinion, one authority has stated:

'. . . (T)he real test should be: What statements by the seller were part of the basis of the bargain? . . . What was he led to believe and what could he justifiably rely upon? The use of the word reliance here, even though not used specifically in Section 2--313, (A.R.S. § 44--2330) would still seem to have some relevance. It would have relevance in distinguishing between fact and opinion; it would have relevance also in distinguishing between known and unknown defects. For example, if the particular defect was quite obvious and the buyer should have discovered it, then it would be difficult to find an actionable express warranty on the part of the seller.' (3 Bender's U.C.C. Service, Sales & Bulk Transfers § 605 at 6--10)

Applying this test, the evidence shows Downs' statement was not merely a casual expression intended to be understood as his opinion. Several meetings took place between the parties before the plaintiffs decided to buy the plane. Robert Shouse, who had bought several used planes in the past, testified:

'Well, when you are purchasing a used aircraft in the conversation with the owner you are going to rely on what he says, how he represents the airplane to be. You can make a visual inspection of the...