Ellis v. Precision Engine Rebuilders, Inc.

• Decision Date: 14 February 2002
• Docket Number: No. 01-00-00787-CV.,01-00-00787-CV.
• Citation: 68 S.W.3d 894
• Parties: Joseph M. ELLIS, Appellant, v. PRECISION ENGINE REBUILDERS, INC., Appellee.
• Court: Texas Court of Appeals

68 S.W.3d 894

Joseph M. ELLIS, Appellant, v. PRECISION ENGINE REBUILDERS, INC., Appellee.

No. 01-00-00787-CV.

Court of Appeals of Texas, Houston (1st Dist.).

February 14, 2002.

William J. Rice, Jr., Rice & Associates, Houston, for Appellant.

James Elmore Hudson, III, Houston, for Appellee.

Panel consists of Chief Justice SCHNEIDER and Justices HEDGES and NUCHIA.

OPINION

ADELE HEDGES, Justice.

Appellant, Joseph M. Ellis, sued appellee, Precision Engine Rebuilders, Inc. (Precision), for breach of contract, violations of the Deceptive Trade Practices Act (DTPA), and breach of implied warranty. The trial court rendered summary judgment for Precision. We affirm.

Background

On October 20, 1997, Ellis bought a rebuilt engine for his Ford Pinto from Precision for $640.40. After installation, the engine did not work properly. Ellis returned the engine to Precision for a second repair on November 14, 1998. Again, the engine did not work properly. After a third repair, Precision discovered the problem and replaced the engine head.

Ellis sued Precision for breach of contract, DTPA violations, and breach of implied warranty. Precision moved for summary judgment, arguing as follows:

(1) The DTPA claim should fail as a matter of law for two reasons:

(a) it is actually a breach of contract action; and

(b) it is barred by limitations.

(2) The contract claim should fail as a matter of law because Precision performed under the contract.

(3) The breach of implied warranty claim should fail as a matter of law because Ellis expressly waived all implied warranties.

Without specifying the grounds for its ruling, the trial court granted the motion and rendered summary judgment for Precision. There is no indication in the record that Ellis objected to the trial court's failure to specify the grounds on which it rendered summary judgment.

In three points of error, Ellis contends that the trial court erred in rendering summary judgment because: (1) Precision failed to perform on the contract claim; (2) the contract claim is not barred by limitations; and (3) the DTPA claim is not barred by limitations.¹

Summary Judgment Standard of Review

To prevail on a motion for summary judgment, a defendant must establish that no material fact issue exists and that it is entitled to judgment as a matter of law. See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex.1999). If a defendant moves for summary judgment on the basis of an affirmative defense, it has the burden to prove conclusively all the elements of the affirmative defense as a matter of law. See KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). In conducting our review of the summary judgment, we take as true all evidence favorable to the nonmovant, and we make all reasonable inferences in the nonmovant's favor. See id.

Breach of Contract: Failure to Perform

In his first point of error, Ellis contends that the trial court erred in rendering summary judgment because Precision failed to perform on the contract claim.

In Southwestern Bell Telephone Co. v. FDP Corp., 811 S.W.2d 572, 576 (Tex.1991), the Texas Supreme Court recognized the distinction between breach of contract and breach of warranty claims:

The UCC recognizes that breach of contract and breach of warranty are not the same cause of action. The remedies for breach of contract are set forth in section 2.711, and are available to a buyer "[w]here the seller fails to make delivery." TEX. BUS. & COM.CODE § 2.711(a). The remedies for breach of warranty, however, are set forth in section 2.714, and are available to a buyer who has finally accepted goods, but discovers that the goods are defective in some manner. Tex. Bus. & Com.Code §§ 2.714, 2.711 (Comment 1).

Accordingly, breach of contract remedies are available to a buyer when the seller fails to make any delivery. S.W. Bell, 811 S.W.2d at 576. In contrast breach of warranty remedies are available to a buyer who has received and accepted goods, but discovers they are defective in some manner. Id. In other words, when a party fails to deliver the goods as promised, a breach of contract occurs. See Chilton Ins. Co. v. Pate & Pate Enter., Inc., 930 S.W.2d 877, 890 (Tex.App.-San Antonio 1996, writ denied). Conversely, when a seller delivers nonconforming goods, it is a breach of warranty. Id. Under the Uniform Commercial Code ("UCC"), breach of contract damages are available for failure to perform, but not for delivery of nonconforming goods. Id. We believe that the Chilton court makes a definitive distinction between failure to conform and failure to deliver. See id.

Because Ellis's claim is based on the receipt of defective goods, he has a breach of warranty cause of action, not a breach of contract case. See S.W. Bell, 811 S.W.2d at 576; Roy v. Howard-Glendale Funeral Home, 820 S.W.2d 844, 848 (Tex.App.-Houston [1st Dist.] 1991, writ denied) (holding that buyers of defective burial vault had breach of warranty claim; therefore, breach of contract instruction improper).

Case law holds that breach of contract remedies are available when a seller fails to make any delivery "as promised." See, e.g., S.W. Bell, 811 S.W.2d at 576. In other words, failure to conform is a breach of warranty; whereas failure to deliver is a breach of contract. See id. If the dissent is correct, then breach of contract claims would subsume all breach of warranty claims.

The dissent states, "After accepting nonconforming goods a buyer can still recover breach of contract damages to compensate for the effects of the nonconformity as long as notice of the breach has been timely given to the seller." In support, the dissent cites section 2.714(a) of the Business and Commerce Code. However, neither this section nor the comments specifically mention "breach of contract."² In S.W. Bell, the supreme court instructs us otherwise by interpreting this section to mean that "the remedies for breach of warranty... are set forth in section 2.714" and "the remedies for breach of contract are set forth in section 2.711." S.W. Bell, 811 S.W.2d at 576. Therefore, even if Ellis accepted the goods, discovered they were defective, and gave timely notice to the seller, his remedy would be breach of warranty under section 2.714, not breach of contract under section 2.711. See id.

The dissent criticizes the majority opinion for failing to "account for a situation where goods are rejected after delivery" and for conflicting with the law of revocation. Nowhere in Ellis's petition is there a reference to either issue. We do not address issues that are not pleaded. Moreover, Ellis neither asserts these arguments in his appellate brief nor provides any authority; therefore they are not properly preserved for appellate review. See Tex.R.App. P. 38.1(h).

The first point of error is overruled.

Breach of Contract: Limitations

In his second point of error, Ellis contends that the contract claim is not barred by limitations. Precision's motion for summary judgment did not address this issue. Whether the contract claim was barred by limitations, therefore, was not a basis for summary judgment.

The second point of error is overruled.

DTPA: Limitations

In his third point of error, Ellis contends that the DTPA claim is not barred by limitations.

When there are multiple grounds for summary judgment and the order does not specify the ground on which the summary judgment was rendered, the appealing party must negate all grounds on appeal. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 381 (Tex.1993). If summary judgment may have been rendered, properly or improperly, on a ground not challenged, the judgment must be affirmed. Holloway v. Starnes, 840 S.W.2d 14, 23 (Tex.App.-Dallas 1992, writ denied).

Precision's motion for summary judgment argued that the DTPA claim failed as a matter of law based on the following two grounds:

(1) it is actually a breach of contract action; and

(2) it is barred by limitations.

The summary judgment did not specify the particular grounds on which it was rendered; therefore, Ellis must defeat both grounds presented in Precision's motion. See Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989). Ellis has not done so. Nor has he asserted a general point of error that the trial court erred in rendering summary judgment against him. See Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex.1970). Instead, Ellis challenges only the limitations issue on appeal. The summary judgment, however, may have been rendered, properly or improperly, on the unchallenged ground regarding whether this is actually a breach of contract action. See Holloway, 840 S.W.2d at 23. Accordingly, we need not address the limitations argument. See Lewis v. Adams, 979 S.W.2d 831, 833 (Tex.App.-Houston [14th Dist.] 1998, no pet.). Because Ellis did not negate all the DTPA grounds on appeal, the judgment must be affirmed with regard to that cause of action. See id.

The third point of error is overruled.

Conclusion

We affirm the judgment of the trial court.

Chief Justice SCHNEIDER dissenting.

En banc consideration was requested.

A majority of the justices of the Court voted to overrule the request for en banc consideration.

Justice MIRABAL dissents from the overruling of the request for en banc consideration and would join the dissenting opinion of Justice SCHNEIDER.

MICHAEL H. SCHNEIDER, Chief Justice, dissenting.

The majority opinion states,

Breach of contract remedies are available to a buyer when the seller fails to make any delivery. In contrast, breach of warranty remedies are available to a buyer who has received and accepted goods, but discovers they are defective in some manner.... [B]reach of contract damages are available for failure to perform, but not for delivery of non-conforming goods.

(citations omitted). I disagree with the bright-line distinction made between breach of contract and breach of warranty actions at the time of delivery for the...