Harrington v. Holiday Rambler Corp.

• Decision Date: 22 March 1978
• Docket Number: No. 13662,13662
• Citation: 35 St.Rep. 46,176 Mont. 37,575 P.2d 578
• Parties: Moody J. HARRINGTON and Vicki Harrington, husband and wife, Plaintiffs and Respondents, v. HOLIDAY RAMBLER CORPORATION, Defendant and Appellant.
• Court: Montana Supreme Court

Page 578

575 P.2d 578

176 Mont. 37

Moody J. HARRINGTON and Vicki Harrington, husband and wife, Plaintiffs and Respondents, v. HOLIDAY RAMBLER CORPORATION, Defendant and Appellant.

No. 13662.

Supreme Court of Montana.

Submitted Nov. 28, 1977.

Decided Jan. 13, 1978.

Rehearing Denied March 22, 1978.

Church, Harris, Johnson & Williams, Great Falls, Donald A. LaBar (argued), Great Falls, Earl J. Hanson (argued), Great Falls, for defendant and appellant.

Hoyt & Bottomly, Great Falls, John C. Hoyt (argued), Great Falls, Tom L. Lewis (argued), Great Falls, for plaintiffs and respondents.

DALY, Justice:

Plaintiffs Moody J. Harrington and Vicki Harrington commenced this action in the District Court, Cascade County, alleging fraud and breach of warranty to recover damages from alleged defects in a travel trailer purchased by them from Holiday Rambler Corporation. The jury returned a verdict for both general damages and punitive damages in favor of Harringtons. From this final judgment Holiday Rambler appealed.

Holiday Rambler is a manufacturer of travel trailers and sells these trailers to qualified independent dealers throughout the United States, who in turn sell directly to the public.

The trailer involved in the instant litigation is a 1972 model Holiday Rambler Travel Trailer constructed by defendant in Wakarusa, Indiana, in September 1971. Similar to the automobile business, the travel trailer business manufactures some of the new models prior to the beginning of a calendar year, and the travel trailer in question here was one of the first of the 1972 models produced in the fall of 1971. It was 8 feet wide and 31 feet long with tandem axles.

An independent Spokane, Washington dealer, Don King, transported the trailer to Spokane from the factory after a dealers' meeting in September 1971. Before the trailer left the factory its various components, including the LP gas system, plumbing system, water system, and electrical system were checked and approved. The dealer, Don King, who was never made a party to the action, but testified the same systems were checked for the Harringtons prior to the time they purchased the trailer and took delivery in Spokane, Washington, on March 6, 1972.

The total purchase price of the travel trailer was $9,506.90. They paid $2,506.90 down, and the remaining balance of $7,000 was financed over 7 years at 12 percent interest.

On March 11, 1972, the Harringtons left Spokane for Great Falls, Montana and after they settled in Montana they complained of defects in the trailer to Holiday Rambler. At that time Holiday Rambler offered, in writing, to make repairs to the total satisfaction of the Harringtons without cost only if the Harringtons would bring the trailer to the factory at Wakarusa, Indiana. They refused this offer of repair and insisted on a new trailer.

In August 1972, the trailer was parked adjacent to the home of the Harringtons' attorney and left there until the time of trial in November 1976. It was stored outside exposed to the elements and was vandalized on one occasion. The warranty had several months to run at the time the trailer was left with the attorney.

After the trailer was parked at the lot of their attorney no repair requests were made by the Harringtons, no efforts were made to either repair or sell the trailer, and it was abandoned and depreciating until the time of trial. Monthly payments to the finance company eventually ceased in late 1973.

Holiday Rambler defended principally upon the grounds the Harringtons intentionally relinquished any claims they might otherwise have had after they rejected the clear, unequivocal offer to repair made by Holiday Rambler to Harringtons. Further, Holiday Rambler claimed that Harringtons failed to mitigate their damages and contended it never was given a reasonable opportunity to repair the travel trailer.

The case was tried before a jury commencing on November 8, 1976 and continued until November 11, 1976. The jury returned a verdict in favor of plaintiffs and against defendant, assessing $17,691.90 in general damages and $20,000 in punitive damages.

The issues presented for review are:

1. Whether the verdict for general damages in favor of plaintiffs was supported by substantial credible evidence?

2. Did the court commit reversible error in overruling defendant's objection to plaintiffs' testimony concerning opinions as to causation of physical illness?

3. Did the court commit reversible error in giving plaintiffs' proposed instruction on punitive damages?

4. Did the court commit reversible error in giving plaintiffs' proposed instruction on "implied malice"?

5. Did the court commit reversible error in denying defendant's motions for directed verdicts on the issues of:

a. actual fraud;

b. constructive fraud; and

c. strict liability.

Issue 1. In Strong v. Williams (1969), 154 Mont. 65, 68, 460 P.2d 90, 92, this Court said:

"It is well settled in this jurisdiction that wherever there is a conflict in the evidence this Court may only review the testimony for the purpose of determining whether there is any substantial evidence in the record to support the verdict * * *. Where the evidence is conflicting, but substantial evidence appears in the record to support the judgment, the judgment will not be disturbed on appeal * * *."

See also: Kirby v. Kelly (1972), 161 Mont. 66, 504 P.2d 683; Davis v. Davis (1972), 159 Mont. 355, 497 P.2d 315.

It is apparent from the record that the jury as a matter of law misconstrued the court's instruction on the measure of damages for breach of warranty i. e., the difference between the value of the goods accepted and the value they would have had if they had been as warranted. The jury awarded the sum of $12,691.90 for the trailer as a part of the general damages. The total price paid by plaintiffs for the trailer was $9,506.90. That price included options and services which were sold to them directly by Don King Trailer Sales and were not warranted products on the trailer when the trailer was sold by Holiday Rambler to Don King. These added options and services had a total value of $1,506.90. The jury awarded the value of the entire retail value of the trailer, the value of all the services and options supplied by Don King, and in addition awarded the total amount of time charges for the entire amount of the sales contract, all of which amounted to $12,691.90. Although there are but a few cases on this point, it is the rule of law that a consumer purchaser cannot recover the purchase price from the manufacturer who was not a party to the sale on the grounds of breach of warranties. Carlson v. Shepard Pontiac, Inc. (1970), 63 Misc.2d 994, 314 N.Y.S.2d 77. The reason for this rule is apparent in the instant case. The defendant, Holiday Rambler, did not receive the sales price. The actual sales price which included the dealer's profit was received and retained by Don King, the independent dealer, who was not a party to this action. The only money received by Holiday Rambler was the wholesale price which was paid by Don King to Holiday Rambler. Therefore, Harringtons would have to join the dealer as a party and sue for recission to recover the full purchase price, which included the dealer's profits. This, plaintiffs failed to do. The jury awarded damages for the full purchase price which included the brake controls, awning, trailer hitch, all items not manufactured or supplied by Holiday Rambler. Also, Holiday Rambler had no part in the financing, which was handled through the dealer.

Holiday Rambler contends that it is a universal rule that a party must mitigate all of his damages. Holiday feels that Harringtons' failed to mitigate damages by not having the trailer repaired by a third party, failing to cover by purchasing a substitute trailer and continuing to use the trailer after they knew of defects. This doctrine of avoidable consequence is properly stated in Spackman v. Ralph M. Parsons Co. (1966), 147 Mont. 500, 505, 414 P.2d 918, 921, where this Court held:

"The duty to reduce or mitigate damages is a positive one upon the injured person, but it has limits. The test is: What would an ordinary prudent person be expected to do if capable, under the circumstances?"

The record discloses the Harringtons did everything within their power to have the trailer repaired by the authorized Holiday Rambler dealer. They did not take it to a third party to be repaired because they were fearful of voiding the warranty. A suggestion that Harringtons should have to buy another trailer for some $9,000 is clearly not within the doctrine. Harringtons had no other choice but to use the trailer after they discovered the defect. It was serving as the family home because of a severe housing shortage in Great Falls when the family arrived there.

As stated, the jury in awarding damages failed to:

(1) Subtract out accessories and services totaling $1,506.90 for which Holiday Rambler did not warrant and is not liable.

(2) Take into account that Holiday Rambler is not liable for finance charges which totaled $3,185.

There is substantial credible evidence to support a proper verdict computed as:

                General Damages Given by
                 District Court              $17,691.90
                Less Services & Accessories   -1,506.90
                Less Finance Charge           -3,185.00
                                             -----------
                       Proper award          $13,000.00
                

Issue 2. Holiday Rambler contends the trial court erred in overruling its objection to unqualified opinion evidence given by Mr. Harrington regarding causation of physical illness. Harringtons presented no medical testimony of a physician. They presented no copies of medical records or bills of any doctor or hospital. The only proof of any physical sickness caused the Harringtons due to defects in the trailer was given by the Harringtons themselves. The testimony given by Moody Harrington should not have been admitted over objection of counsel. The testimony...