Helterbrand v. Five Star Mobile Home

Decision Date26 June 2001
Citation48 S.W.3d 649
Parties(Mo.App. S.D. 2001) Edgar K. Helterbrand and Mary Ann Helterbrand, Respondents v. Five Star Mobile Home Sales, Inc., Appellant. WD58418 0
CourtMissouri Court of Appeals

Appeal From: Circuit Court of Ray County, Hon. Werner A. Moentmann

Counsel for Appellant: J.D. Gorham
Counsel for Respondent: George W. Lehnen, III

Opinion Summary: Five Star Mobile Home Sales, Inc., appeals the court's judgment awarding Edgar K. and Mary Ann Helterbrand damages for breach of an "implied warranty of merchantability" with respect to the sale of a manufactured home. Although not pled in their petition, the Helterbrands presented evidence and argued at trial that the sales contract regarding the home was amended, requiring Five Star, inter alia, to serve as the general contractor for the construction of their garage and for excavation and finish grade work at the home site, and that the garage was defective as constructed and that the dirt work was not completed as agreed.

On appeal, Five Star raises two points. First, it claims the court's finding for the Helterbrands and award of damages to them on the breach of an "implied warranty of merchantibility" misapplied the law and was not supported by the record. Second, it argues the court's award of damages "under theories of appellant's breach of implied warranty of merchantability or of breach of contract" was not supported by substantial evidence of the proper measure of damages for such causes of action or misapplied the law to the facts.

AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

Division Three holds: As to Point I, although Five Star assumes the court's award was based on a finding that it breached an implied warranty of merchantability, that does not appear to be the case. The record seems to indicate that the actual theory of recovery on which the court awarded damages may have been for a breach of contract. Regardless of the proper denomination for the theory of recovery, the issue is whether the appellant agreed to serve as the general contractor for the work in question.

Because it is clear from the contract amendment that Five Star did not obligate itself to serve as a general contractor for the excavation and finish grade work, the court was not free to consider parol evidence presented at trial on this issue. The court's finding that Five Star failed to complete the dirt work thus was not supported by the record, and the court's award of $1,500 for breach of the nonexistent agreement also was in error. However, because the contract amendment regarding the garage is ambiguous on its face, the court was free to consider parol evidence presented at trial to determine the parties' intent as to Five Star's role, if any, in the construction of the garage. The court was free to believe the Helterbrands' evidence and thus its decision finding that Five Star had agreed to act as general contractor for construction of the garage is supported by the evidence. The trial court's award of damages with respect to the construction of the garage was not in error.

As to Point II, in the argument portion of its brief, the only argument asserted by the appellant, and authority cited in support thereof, pertaining to damages for breach of contract is that paragraph 12 of the sales contract expressly limited the Helterbrands' damages to the "lesser of either the costs of needed repairs or reduction in the market value of the unit cause by the lack of repairs, a common measure of damages under law," and there was no evidence in the record of the diminution of value. From the express language of this paragraph, it is clear that its application in limiting the Helterbrands' damages would apply only where a breach of the manufacturer's warranty and its failure to satisfactorily repair could be found. This factually is not our case, and thus, paragraph 12 has no application or bearing on the issue presented.

Edwin H. Smith, Judge

Five Star Mobile Home Sales, Inc., appeals from the judgment of the Circuit Court of Ray County, after a trial before the court, awarding the respondents, Edgar K. and Mary Ann Helterbrand, damages on Count I of their five-count petition, in which count they alleged that the appellant had breached an "implied warranty of merchantability" with respect to the sale of a manufactured home. Although not pled in their petition, the respondents presented evidence and argued at trial that the sales contract regarding the home was amended, requiring the appellant, inter alia, to serve as the general contractor for the construction of their garage and for excavation and finish grade work at the home site, and that the garage was defective as constructed and that the dirt work was not completed as agreed.

The appellant raises two points on appeal. In Point I, it claims that the trial court erred in finding for the respondents and awarding them damages on their claim for breach of an "implied warranty of merchantability" with respect to the construction of their garage and the failure to complete the related excavation and finish grade work at the home site because the court's judgment misapplied the law and was not supported by the record. In Point II, it claims that the trial court erred in awarding the respondents damages "under theories of appellant's breach of implied warranty of merchantability or of breach of contract" because such an award was not supported by substantial evidence of the proper measure of damages for such causes of action or misapplied the law to the facts. We affirm in part, and reverse and remand in part.

Facts

In early September of 1996, the respondents decided to move from Indiana to Kansas City, Missouri, where respondent, Edgar Helterbrand, would be working. Before actually moving, they visited the Kansas City area to determine where they wanted to live. During their visit, they contacted a realtor, having decided they wanted to find some property outside of Kansas City on which to place a manufactured home. To this end, they searched the telephone directory to find a manufactured home dealer in the area, finally deciding upon the appellant.

On September 28, 1996, they entered into a contract for the purchase of a manufactured home from the appellant. The contract was a standard form contract, which specified that it was to be a new 1997 home, 28 feet wide and 56 feet long, with three bedrooms. The purchase price agreed upon was $66,448.15. Included in the price was a stove, refrigerator, and dishwasher. The appellant agreed to deliver the home, set it up on a basement foundation, and hook up the water and sewer lines, "if stubbed within 5 ft of [the] home." The manufacturer of the home was Champion Home Builders Co. (Champion), which was located in Nebraska.

The respondents made a down payment of $6,650 on the home, leaving an unpaid balance of $59,798.15. The contract specified that the $6,650 deposit was "refundable on credit rejection only." Because the respondents were new to town, Rick Spurgeon, a salesman for the appellant, agreed to help procure financing for them to pay the balance of the purchase price. He also agreed to contact contractors for the construction of the garage and the excavating and finish grade work, and told them that, as to the home, it would be a "turn-key" job, meaning that everything would be taken care of so that all the respondents had to do was "turn the key [to the house] and walk in." Thereafter, the respondents applied for and received a loan commitment from the Cameron Savings and Loan Association. As to the loan agreement, Jeff Paussa, the president of and site manager for the appellant, co-signed as "contractor."

In December of 1996, one month after the respondents were supposed to have moved into their new home, the home arrived, unassembled, at the appellant's dealership in Kansas City. The respondents inspected it and found that it was not as ordered in several respects. Specifically, the walls in several rooms were not drywall, but paneling, and the countertops and kitchen floors were the wrong color. By early March of 1997, the respondents' manufactured home had been delivered to their property, but still remained unassembled. In return for the respondents accepting the home in its nonconforming state, the parties agreed to an "amendment" or addendum to the sales contract, which was dated March 5, 1997. The addendum provided, in pertinent part:

FIVE STAR Mobile Home Sales, Inc.

March 5, 1997

This is an amendment to the purchase agreement dated Sept. 28, 1996 which initiated the order of the Helterbrand's [sic] new home to be built and shipped by Champion Homes.

It is an acknowledgment that their new home model # RU560C, delivered to our dealership Dec. 21, 1996 was somewhat deifferent [sic] than what they ordered.

They have since inspected the home and have agreed to accept it with the cost adjustments reflected in this amendment, and a commitment described below and agreed to by Five Star Mobile Home Sales Inc.

Seller agrees to : . . . give buyer a $700.00 allowance to purchase a wallpaper with a textured finish similar to the walls of living area.Seller has reimbersed [sic] money paid by buyer, directly to sellers [sic] employee to personally perform services not included in the original purchase agreement.

Five Star has also agreed to expedite loan commitment and pay for site costs that exceeded estimates consisting of but not limited to:

Extra rock, gravel and labor to spread this for a driveway, additional excavation and finish grade work, delivery from lot, termite control. Five Star is fully commited [sic] to seeing to it that the garage is completed no later than March 20, 1997 and sees no apparant [sic] reason that this can't be accomplished.

The addendum further provided that the "Seller agrees to . . . give buyers a $250 allowance for phone & TV jacks."

Eventually, the foundation for the home was completed, and the home...

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