Gladden v. Cadillac Motor Car Division, General Motors Corp.

• Decision Date: 30 June 1980
• Citation: 416 A.2d 394,83 N.J. 320
• Parties: , 29 UCC Rep.Serv. 369 Viola GLADDEN, Plaintiff-Respondent, v. CADILLAC MOTOR CAR DIVISION, GENERAL MOTORS CORPORATION, a corporation licensed to do business in the State of New Jersey, Defendant, and Uniroyal, Inc., Defendant-Appellant, and Lex Depp Cadillac, Defendant.
• Court: New Jersey Supreme Court

Page 320

83 N.J. 320

416 A.2d 394, 29 UCC Rep.Serv. 369

Viola GLADDEN, Plaintiff-Respondent, v. CADILLAC MOTOR CAR DIVISION, GENERAL MOTORS CORPORATION, a corporation licensed to do business in the State of New Jersey, Defendant and Uniroyal, Inc., Defendant-Appellant and Lex Depp Cadillac, Defendant.

Supreme Court of New Jersey.

Argued Nov. 27, 1979.

Decided June 30, 1980.

David L. Menzel, Morristown, for defendant-appellant (Stryker, Tams & Dill, Morristown, attorneys).

Daniel R. Coburn, Morristown, for plaintiff-respondent (Coburn & Bronstein, Morristown, attorneys).

The opinion of the Court was delivered by

HANDLER, J.

Plaintiff seeks to recover from Uniroyal, Inc. (hereinafter "Uniroyal"), a national automobile tire manufacturer, property damages for the total loss of her automobile based upon breach of express warranty covering the automobile's tires. Plaintiff claimed that the right rear tire failed while the car was being driven by her brother, causing the car to leave the road and strike a guardrail and tree. Uniroyal disputed that the tire's failure under the circumstances constituted a breach of its warranty. It also asserted that, in any event, its liability for such a warranty breach was limited to a refund for or replacement of that tire. On the authority of Collins v. Uniroyal, Inc., 64 N.J. 260, 315 A.2d 16 (1974), the trial court ruled that this limitation of liability was ineffective. It is this ruling, sustained by the Appellate Division, which is the focus of this appeal.

I

Plaintiff Viola Gladden was the owner of a 1974 Coupe de Ville hardtop Cadillac automobile. Her younger brother, Larry Brown, was driving the automobile from South Carolina to Morristown, New Jersey and, on September 1, 1975, while traveling easterly on Route 22 near Harrisburg, Pennsylvania, the automobile left the roadway and struck a guardrail and tree. As the car left the road, both Brown and his passenger heard a "big pop" or "pow-like" noise; the right rear tire was later discovered about two feet from the scene of the accident.

Plaintiff bought the new automobile for her brother in July 1974, although Brown handled the actual purchase. Brown testified that he had thought that he was getting a "top-notch car" which should have the "better tires" and he therefore requested "steel-belted radials." He further testified that steel-belted radial tires were advertised on television and in newspapers and although he did not request any particular brand of tires, he was sold Uniroyal tires. Distributed with the tires was a booklet described in large letters on the front cover as "OWNER'S GUIDE AND GUARANTEE," which contained a section in bold, red printing encaptioned "UNIROYAL STEEL BELTED RADIAL TIRE GUARANTEE." Brown testified that he had "skimmed through" the guarantee booklet and that he had thought that he understood its contents.

Seeking only property damages for the loss of the automobile, plaintiff brought a lawsuit against the Cadillac Motor Car Division of General Motors Corporation, Lex Depp Cadillac, and Uniroyal, Inc. Summary judgment for defendant Lex Depp Cadillac was granted prior to trial. The cause of action against Cadillac Motor Car Division was dismissed upon plaintiff's failure to establish a prima facie case.

At trial, plaintiff's theory of liability against Uniroyal was predicated upon her expert's claim that the automobile had gone out of control and had left the road after the right rear tire blew out either because of some factor relating to the road, or because of a defect in the manufacturing, the mounting, or dismounting of the tire. The defendant and its expert contended that, after the automobile had left the roadway, the tire failed when the vehicle struck the guardrail and tree. The case was sent to the jury on theories of strict liability, implied warranty, and express warranty. Answering special interrogatories, the jury found that the tire was not defective but, that Uniroyal had, nevertheless, breached its express warranty. Uniroyal's motion for a judgment notwithstanding the verdict was denied and the jury award of $6,250 plus interest for property damage to plaintiff's car was entered.

On appeal, Uniroyal contended that the evidence of a breach of warranty was inadequate and that the trial court had erred in submitting this issue to the jury. It also asserted that its guarantee did not constitute a promise that the tires would not fail but only a promise that, if there were a tire failure, the tire would be replaced or the purchase price would be refunded on an apportioned basis. For that reason, Uniroyal contended that the trial court had erred in ruling that the guarantee, which restricted its liability as to damages, was unconscionable and, thus, unenforceable.

The Appellate Division in an unreported decision reversed on the ground that the trial court had given an incorrect or inadequate instruction to the jury on the express warranty question. It concluded that a new trial should have been granted. The appellate court, however, rejected Uniroyal's contentions with respect to the validity of the remedy restrictions of the guarantee. Uniroyal's petition for certification, granted at 81 N.J. 285, 405 A.2d 829 (1979), sought review only of the question of the validity of the remedy restriction which appears in the warranty.

II

The initial question is whether Uniroyal's undertaking constituted an express warranty. The Uniform Commercial Code (hereinafter the "UCC" or "Code"), N.J.S.A. 12A:1-101 et seq., deals with the creation of warranties. It provides as follows:

(1) Express warranties by the seller are created as follows:

(a) 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 creates an express warranty that the goods shall conform to the affirmation or promise.

(2) 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. (N.J.S.A. 12A:2-313.)

The UCC Comments to this section emphasize that no specific intention to make a warranty is necessary if part of the basis of the bargain consists of the seller's affirmations of fact or descriptions of the goods. N.J.S.A. 12A:2-313, Comment 3. The Comments state further that express warranties rest on "dickered" aspects of the individual bargain. N.J.S.A. 12A:2-313 , Comment 1. Particular reliance on such statements of description or quality need not be shown and the warranty issue will be normally a factual one. N.J.S.A. 12A:2-313, Comment 3.

As noted, the booklet distributed by Uniroyal with the purchase of its steel-belted radial tires contained a section entitled "UNIROYAL STEEL BELTED RADIAL TIRE GUARANTEE." It expressly "guaranteed (the tires) for 40,000 odometer miles" in three specific situations, two of which arguably apply to this case. One such situation relates to "road hazard protection" which furnishes a guarantee "(i)f within 40,000 vehicle odometer miles the tire becomes unrepairable due to impact breaks, snags, cuts or punctures . . . ." The other, referred to as a "(g)eneral (g)uarantee," applies "(i) f a tire becomes unserviceable, for any reason other than wearout of (those enumerated in) the specific road hazards (guarantee) . . . ."

An express warranty under the Code can arise even though the word "warranty" is not used. N.J.S.A. 12A:2-313(2). Guarantees are viewed as warranties under New Jersey case law. See Jutta's Inc. v. Fireco Equipment Co., 150 N.J.Super. 301, 306, 375 A.2d 687 (App.Div.1977); Adams v. Peter Tramontin Motor Sales, Inc., 42 N.J.Super. 313, 319, 126 A.2d 358 (App.Div.1956). In Jutta's Inc., the Appellate Division, calling the manufacturer's guarantee an "express guarantee," treated it as an express warranty. 150 N.J.Super. at 306, 375 A.2d 687. In Adams, the Appellate Division held that a 90-day guarantee of repair or replacement of parts constituted an express warranty because it was made before the sale, was given to the buyer "in case anything went wrong," and had a "natural tendency" to induce the sale of the automobile. 42 N.J.Super. at 319, 126 A.2d 358. Similarly, guarantees were treated as express warranties in Collins v. Uniroyal, Inc., 64 N.J. 260, 315 A.2d 16 (1974). See also McCarty v. E. J. Korvette, Inc., 28 Md.App. 421, 427, 347 A.2d 253, 258 (Ct.Spec.App.1975) (tire guarantee is express warranty). Hence, it is of no legal significance that Uniroyal's undertaking with respect to its tires was denominated a "guarantee" rather than a "warranty." Its obligation was an express warranty if it could fairly be understood, regardless of Uniroyal's intent, to constitute an affirmation or representation that the tires possessed a certain quality and capacity relating to future performance.

The provisions of the tire guarantee were included in the "OWNER'S GUIDE AND GUARANTEE." That booklet deals extensively with the characteristics, quality, capacity, and performance of Uniroyal steel-belted radial tires. It states, for example, that "(t)he radial design provides superior tread mileage, traction and lower rolling resistance . . . ." The tire is said to be "engineered to provide a proper balance" as to certain "performance characteristics," e. g. "tread mileage, traction, endurance, road hazard resistance." In addition, the booklet is replete with references to "guarantee." The word "guarantee" is prominently displayed on the cover; on the very first page the owner is advised that the booklet contains "40,000 mile guarantee provisions." A separate section of the booklet alerts the purchaser in bold type to the "UNIROYAL STEEL BELTED RADIAL TIRE GUARANTEE," and throughout that section the...