Ferragamo v. Massachusetts Bay Transp. Authority

• Decision Date: 08 August 1985
• Citation: 481 N.E.2d 477,395 Mass. 581
• Parties: , 41 UCC Rep.Serv. 304, Prod.Liab.Rep. (CCH) P 10,860 Paul G. FERRAGAMO, administrator, 1 v. MASSACHUSETTS BAY TRANSPORTATION AUTHORITY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 477

481 N.E.2d 477

395 Mass. 581, 41 UCC Rep.Serv. 304,

Prod.Liab.Rep. (CCH) P 10,860

Paul G. FERRAGAMO, administrator, ¹ v. MASSACHUSETTS BAY TRANSPORTATION AUTHORITY.

Supreme Judicial Court of Massachusetts Suffolk.

Argued March 6, 1985.

Decided Aug. 8, 1985.

Thomas F. Maffei, Boston, (Thomas T. Olivier, Cambridge, with him), for defendant.

Andrew C. Meyer, Jr., Boston, for plaintiff.

Before HENNESSEY, C.J., and WILKINS, ABRAMS, NOLAN and LYNCH, JJ.

ABRAMS, Justice.

On August 16, 1976, Michael Ferragamo died of respiratory failure after spending three weeks dismantling used trolley cars purchased by his brother, the plaintiff in this action, from the Massachusetts Bay Transportation Authority (MBTA). A jury found the defendant MBTA liable for negligence and breach of warranty resulting in the death of Michael Ferragamo. The judge granted the defendant's motion for judgment notwithstanding the verdict only with respect to those counts sounding in breach of warranty. Both parties appealed. We reverse the judgment notwithstanding the verdict on the breach of warranty claims, and affirm the judgment on the negligence claims.

The jury could have found the facts to be as follows. In June, 1976, the defendant sent Paul Ferragamo an invitation to bid on eight trolley cars, no longer being used in the subway system. ² Paul Ferragamo, as the successful bidder, signed a contract of sale which described the items purchased as "8-scrap P.C.C. Cars complete 'As is' Where is." The contract further provided that "[a]ll property listed herein is offered for sale 'as is' and 'where is' and without recourse against the Authority. The Authority makes no guaranty, warranty, or representation, express or implied, as to the quantity, kind, character, quality, weight, size or description of any of the property...." The purchaser was to be "solely responsible for all injuries to persons or damage to property occurring on account of, or in connection with" dismantling the cars and removing them from MBTA premises.

Car No. 3298, one of the eight cars purchased by Paul Ferragamo, had been "involved in [a] fire at the Kenmore Square M.B.T.A. station in July of 1975." The jury could have found that as a result of that fire, forty-five firemen, several passengers, and a number of MBTA employees had been treated for possible exposure to polyvinyl chloride (PVC) fumes; ³ that a chemist had determined that there was some "25.7 lbs. of PVC compound" in "the area of the fire"; and that Car No. 3298 was covered with drippings of melted plastic.

It was one year after the fire that Paul Ferragamo engaged his twenty year old brother, the decedent, to assist in dismantling the eight trolley cars at the defendant's Watertown yard. The decedent completed work on the first two cars without incident. The plaintiff and the decedent began to dismantle Car No. 3298 during the week of August 8, 1976. They first cleared the debris from the car and scraped off as much of the plastic drippings as possible, whereupon the decedent proceeded to cut through the remaining plastic with an acetylene torch. Wearing a dust mask only intermittently, the decedent cut the car from Monday through Friday in very hot weather. His voice became progressively more hoarse during the week and he experienced considerable shortness of breath and a sore throat. On the morning of August 16, 1976, the decedent was gasping for breath in his sleep. He was then taken by ambulance to the hospital where he died shortly thereafter "as a result of acute respiratory failure." On the day following his brother's death, Paul Ferragamo spoke with the MBTA foreman at the Watertown yard and told him about the death. Paul Ferragamo was then informed for the first time that "there was something wrong with that car, that there had been PVC near it or in it...."

The plaintiff filed this action on July 11, 1978. The complaint embraced four counts. In Counts I and III, the plaintiff sought damages for the decedent's wrongful death and conscious suffering occurring as a result of the defendant's negligence. Counts II and IV sought damages on a theory of breach of warranty. ⁴ On May 6, 1983, a jury returned verdicts for the plaintiff on all four counts while finding the decedent contributorily negligent by thirty-five percent on the two negligence counts.

On May 16, 1983, the MBTA moved for judgment notwithstanding the verdicts. The judge allowed the motion as to Counts II and IV--the warranty counts--but denied the MBTA's motion as to Counts I and III--the negligence counts. He ruled "that on the facts in this case the defendant MBTA is not a 'Merchant' as that term is defined in M.G.L.A. Chap. 106, Sec. 2-104(1). Since the defendant is not a 'merchant' the provisions of M.G.L.A. Chap. 106, Sec. 2-314 do not apply and there was no implied warranty that the car in question was fit for the ordinary purpose for which it was sold." The judge further held that although "[t]he evidence on this question is slight," there was "enough to warrant a jury to find that PVC was present on or in the car; that this presence was known or should have been known to the defendant and imposed on the defendant a duty to warn of the danger involved in cutting up the car with an acetylene torch." Both parties then filed notices of appeal in the Appeals Court. ⁵ We transferred the matter to this court on our own motion.

On appeal, the plaintiff argues that the MBTA is a merchant, for purposes of the implied warranty of merchantability set forth in G.L. c. 106, § 2-314(1) (1984 ed.), ⁶ and that the verdicts on the breach of warranty claims must thus be reinstated. The defendant contends that the trial court judge ruled correctly; that even if the MBTA were a merchant, the disclaimers in the contract of sale were effective; that the jury's special finding of comparative negligence ought either to bar the plaintiff's recovery for breach of warranty or to reduce that recovery by a factor proportionate to the decedent's negligence; and that, in any event, there was insufficient evidence for the jury to find that PVC was present on or in Car No. 3298 at the time Michael Ferragamo worked on it.

1. The MBTA's status as a "merchant." The parties do not dispute that the MBTA may not be held liable for breach of an implied warranty of merchantability under G.L. c. 106, § 2-314(1), unless the MBTA is a "merchant," within the meaning of the statute. The MBTA maintains, in essence, that because its sales of used trolley cars are "incidental" to its primary business as a matter of law, it cannot be viewed as a merchant of scrap trolley cars. We disagree.

The judge submitted the question whether "the M.B.T.A. was a merchant with respect to the sale of Car 3298" to the jury. ⁷ Only in his memorandum of decision on the motion for judgment notwithstanding the verdict did he rule that, as a matter of law, the MBTA was not a merchant. That ruling was incorrect.

The definition of "merchant" is set forth at G.L. c. 106, § 2-104(1) (1984 ed.): " '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." Further, a warranty of merchantability under G.L. c. 106, § 2-314, is implied only "if the seller is a merchant with respect to goods of that kind." "Obviously this qualification restricts the implied warranty to a much smaller group than everyone who is engaged in business and requires a professional status as to particular kinds of goods." G.L. c. 106, § 2-104 comment 2, at 190 (Law.Coop.1984).

Thus, the dual requirements of G.L. c. 106, §§ 2-104(1) and 2-314, lead us to ask whether there was evidence that the MBTA "regularly deals in goods of the kind involved or otherwise has a professional status with regard to the goods involved such that [it] could be expected to have specialized knowledge or skill peculiar to those goods." Cropper v. Rego Distribution Center, Inc., 542 F.Supp. 1142, 1154 (D.Del.1982). Moreover, that inquiry "is of necessity highly dependent on the factual setting of the transaction in question. Consequently, whether a person is a merchant is to be determined according to the circumstances of each case." 1 R.A. Anderson, supra at § 2-104:25. Particularly with respect to the seller of used equipment is such a determination contingent on the factual background. See id. at §§ 2-104:29--2-104:45. We conclude that the instant circumstances warranted the jury's determination that the MBTA is a merchant with respect to its sales of used trolley cars.

The jurors could have found the following facts: First, the MBTA stipulated that it "sells almost all of its old M.B.T.A. trolley cars for scrap." Second, the MBTA had solicited a bid from the plaintiff among others, on the eight trolley cars to be sold. Third, the eight trolley cars were purchased by the MBTA in 1951 and were operated and repaired by MBTA employees for approximately twenty-five years. Fourth, MBTA agents had originally designed the cars which were then built to their specifications.

This concatenation of facts and the reasonable inferences drawn from them permitted the jury to find that the MBTA is a merchant with respect to used trolley cars. "The term 'merchant' ... roots in the 'law merchant' concept of a professional in business. The professional status under the definition may be based upon specialized knowledge as to the goods...." G.L. c. 106, § 2-104, comment 2, at 189 (Law.Coop.1984). "Professionalism, special knowledge and commercial experience are to be used in determining whether a person in a particular situation is to be held to the standards of a merchant." Decatur Coop. Ass'n v. Urban, 219...