General Motors Acceptance Corp. v. Anaya

• Decision Date: 11 July 1985
• Docket Number: No. 15059,15059
• Citation: 103 N.M. 72,703 P.2d 169,1985 NMSC 66
• Parties: , 41 UCC Rep.Serv. 824 GENERAL MOTORS ACCEPTANCE CORPORATION, Plaintiff-Appellee, v. Robert ANAYA and Ester Anaya, His wife, Defendants-Counterclaimants-Appellants, v. GENERAL MOTORS CORPORATION, et al., Counterclaim Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 169

703 P.2d 169

103 N.M. 72, 41 UCC Rep.Serv. 824

GENERAL MOTORS ACCEPTANCE CORPORATION, Plaintiff-Appellee, v. Robert ANAYA and Ester Anaya, His wife, Defendants-Counterclaimants-Appellants, v. GENERAL MOTORS CORPORATION, et al., Counterclaim Defendants-Appellees.

No. 15059.

Supreme Court of New Mexico.

July 11, 1985.

Rehearing Denied Aug. 2, 1985.

[103 N.M. 73] Jerrald Roehl, Ronald W. Henkel, Jerrald Roehl and Associates, Albuquerque, for GMAC.

Ron Morgan, Joan Marie Hart, Albuquerque, for Anayas.

Russell D. Mann, Atwood, Malone, Mann & Turner, Roswell, for GMC.

OPINION

WALTERS, Justice.

General Motors Acceptance Corporation (GMAC) brought a replevin action, under a financing contract assigned to GMAC by Ken Schultz Buick/(Schultz) GMC, Inc., for return of an automobile purchased by Robert and Ester Anaya (the Anayas). The Anayas counterclaimed against GMAC, Schultz, and the manufacturer, General Motors Corporation (GMC), alleging contract, tort, and statutory violations arising from defects in the automobile and a subsequent failure to correct those defects pursuant to warranty obligations. Various third-party complaints are no part of this appeal. The jury awarded the Anayas approximately $40,000 in compensatory damages under various theories, and $675,000 in punitive damages. The trial court, granting motions for judgment notwithstanding the verdict, reduced the compensatory damages to approximately $35,000 and eliminated punitive damages altogether. The Anayas appeal, GMC cross-appeals and GMAC submits a conditional request for a review of error. We affirm.

After the Anayas purchased an automobile from Schultz, the financing contract was assigned to GMAC. When the Anayas later defaulted on payment, GMAC sought replevin. The Anayas counterclaimed against GMAC and Schultz under a revocation of acceptance theory; against GMC and Schultz for breach of express warranty; against GMC and GMAC for willful breach of contract; against Schultz for fraud or material misrepresentation of fact; and against GMC and Schultz for violations of the Motor Vehicle Dealer's Franchising (MVDF) Act. NMSA 1978, Secs. 57-16-1 to 57-16-16 (Orig.Pamp. and Cum.Supp.1983). Through special interrogatories, the jury awarded various damages to the Anayas on the various claims.

Following motions for j.n.o.v. by GMC, GMAC, and Schultz, the trial court (1) eliminated the entire award for breach of warranty, ruling that this remedy was inconsistent with that of revocation of acceptance; (2) eliminated the willful breach of contract award on the same basis of inconsistency, as well as finding insufficient evidence to support the award; and (3) eliminated the incidental and consequential damages awarded under the MVDF Act as being duplicative of awards made under other theories.

Asserting a constitutional right to jury trial and to its verdict, the Anayas seek to have the entire jury verdict reinstated. On cross-appeal, GMC contends that, the Anayas, as retail buyers, do not have standing to sue GMC, a manufacturer, under the MVDF Act. Schultz settled all claims and counterclaims after the appeal was filed; we do not discuss the portions of the trial court's modification of the verdicts or the appellate arguments which relate to Schultz.

I. Breach of Warranty

The Anayas contend that the trial court erred in granting j.n.o.v. on the breach of express warranty claim because the claim is not inconsistent with revocation of acceptance and recovery on both claims does not amount to double recovery. We agree with the trial court. In the review of a jury verdict, for j.n.o.v. purposes, all questions of law lie within the province of the court, "including the legal sufficiency of any asserted claim or defense. If the evidence fails to present or support an issue essential to the legal sufficiency of an asserted claim, the right to jury trial disappears." American Employers' Insurance Co. v. Crawford, 87 N.M. 375, 376, 533 P.2d 1203, 1204 (1975) (citations omitted). Loucks v. Albuquerque National Bank, 76 N.M. 735, 418 P.2d 191 (1966).

Although the trial court mistakenly associated the different consequences attaching to the distinct claims of revocation of acceptance and breach of warranty, on the one hand, with the concept of election of remedies, on the other, the court correctly determined that recovery on one claim renders the other claim inconsistent. Once the jury found that the Anayas had successfully proven all elements essential to establish rightful revocation of acceptance as delineated in the jury instructions and special interrogatories, the trial court properly deemed the breach of warranty theory to be extinguished. See Arbuckle Broadcasters, Inc. v. Systems Marketing Corp., 642 F.2d 402 (10th Cir.1981).

The Anayas correctly argue that under the current version of the Uniform Commercial Code, NMSA 1978, Secs. 55-2-101 to -725 (Sales), "the buyer is no longer required to elect between revocation of acceptance and recovery of damages for breach." NMSA 1978, Sec. 55-2-608, comment 1. However, the nonalternative nature of the remedies does not entitle the buyer to inconsistent or double recoveries. See, e.g., Seekings v. Jimmy GMC of Tucson, Inc., 130 Ariz. 596, 638 P.2d 210 (1981) (buyer who returned vehicle and recovered payments made could not also receive damages for breach of warranty). The theories are "two distinct strands of buyer's remedies under the Code." Ford Motor Credit Co. v. Harper, 671 F.2d 1117, 1121 (8th Cir.1982). Although a buyer may pursue either or both, they are "separate remedies treated in entirely different sections of the Code and they offer separate forms of relief." Id. at 1122.

In Gawlick v. American Builders Supply, Inc., 86 N.M. 77, 519 P.2d 313 (Ct.App.1974), the Court of Appeals determined that in light of the uncontested finding of revocation, the plaintiff's attempt to measure damages under the Code section then in force, which set forth damages for breach of warranty based on acceptance, was misguided. The court held that the applicable sections were those pertaining to revocation of acceptance. Id. at 78, 519 P.2d at 314. Thus, although initially a buyer may present both theories and need not elect between them, the finding of either final acceptance or revocation of acceptance of nonconforming goods ultimately determines the available remedy. See Prince v. LeVan, 486 P.2d 959 (Alaska 1971); Seekings v. Jimmy GMC of Tuscon, Inc.; Performance Motors, Inc. v. Allen, 280 N.C. 385, 186 S.E.2d 161 (1972). Compare Sec. 55-2-711, comment 1 (remedies under this section "are those available to a buyer who has not accepted the goods or who has justifiably revoked his acceptance" whereas those remedies available when goods are "finally accepted appear in the section dealing with breach in regard to accepted goods"), with Sec. 55-2-714, comment 1 ("remedies available to the buyer after the goods have been accepted and the time for revocation of acceptance has gone by"). See Rutherford v. Darwin, 95 N.M. 340, 622 P.2d 245 (Ct.App.1980) (even though not binding on the court, official comment is persuasive of Code section meaning).

Neither the instructions nor the interrogatories indicated to the jury that recovery on one theory precluded recovery based on the other. Nevertheless, the court correctly determined that the verdict awarding relief for both revocation of acceptance and breach of warranty was inconsistent. The instructions outlined the circumstances under which revocation of acceptance may be justified, and advised that damages for breach of warranty are applicable when a buyer has accepted the goods. We must assume that the jury evaluated each theory separately, and assessed damages in accordance with the instructions.

The Anayas urge that there is no evidence that the jury duplicated the damage award and that the jury could have apportioned the actual damages between the revocation of acceptance, breach of warranty, and statutory violation theories. This argument overlooks that the instructions and interrogatories detailed practically identical elements of damages for each theory; the descriptions of incidental and consequential damages emphasized that the same items of injury were to be considered under each theory. Indeed, the Anayas acknowledge that essentially the same damages are available under theories of revocation of acceptance and breach of warranty. Even though the awards reached under each claim were different, there is no clue from the interrogatories that the damage assessment...