Herman v. Bonanza Buildings, Inc.

• Decision Date: 25 July 1986
• Docket Number: No. 85-207,85-207
• Citation: 390 N.W.2d 536,223 Neb. 474
• Parties: , 2 UCC Rep.Serv.2d 430 Albert HERMAN and Mildred Herman, Husband and Wife, Appellants, v. BONANZA BUILDINGS, INC., Appellee.
• Court: Nebraska Supreme Court

Page 536

390 N.W.2d 536

223 Neb. 474, 2 UCC Rep.Serv.2d 430

Albert HERMAN and Mildred Herman, Husband and Wife, Appellants, v. BONANZA BUILDINGS, INC., Appellee.

No. 85-207.

Supreme Court of Nebraska.

July 25, 1986.

Syllabus by the Court

1. Motions to Dismiss. A court may decide an issue as a matter of law only when the facts are such that reasonable minds can draw but one conclusion.

2. Motions to Dismiss: Appeal and Error. In sustaining a motion to dismiss, the court resolves the controversy as a matter of law. In considering the evidence for that purpose, the party against whom the motion to dismiss is made is entitled to have every controverted fact resolved in his or her favor and to have the benefit of every inference which can reasonably be drawn from the evidence; if there is any evidence in favor of the party against whom the motion is made, the case may not be decided as a matter of law. On the other hand, in rendering judgment as the finder of fact, the trial court resolves credibility issues and weighs the evidence in the same manner as does a jury. After so doing, the trial court reaches findings of fact which are equivalent to a jury's verdict. Such findings will not be overturned on appeal unless clearly wrong.

3. Independent Contractor. The factors to be considered in determining whether one acting for another is an agent or independent contractor are, among other things, (1) the extent of control which, by the agreement, the employer may exercise over the details of the work, (2) whether the one employed is engaged in a distinct occupation or business, (3) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision, (4) the skill required in the particular occupation, (5) whether the employer or the one employed supplies the instrumentalities, tools, and the place of work for the person doing the work, (6) the length of time for which the one employed is engaged, (7) the method of payment, whether by the time or by the job, (8) whether the work is a part of the regular business of the employer, (9) whether the parties believe they are creating an agency relationship, and (10) whether the employer is or is not in business.

4. Agents: Sales. One who receives goods from another for resale to a third person is not thereby the other's agent unless the former's duty is to act primarily for the benefit of the one delivering the goods.

5. Ratification: Agents. The rule that affirmance of an unauthorized transaction can be inferred from a failure to repudiate presupposes the existence of a principal-agent relationship and applies where an agent has acted beyond his or her authority.

6. Uniform Commercial Code: Sales: Words and Phrases. Whether a transaction involving both a transfer of goods and the performance of labor is the sale of "goods" as contemplated by Neb. U.C.C. § 2-102 (Reissue 1980) (and thus within the purview of the code) or the sale of "services" (and thus not within the purview of the code) depends upon the predominant purpose of the transaction. If that predominant purpose is the rendition of a service with the goods incidentally involved, the transaction is not the sale of goods; if, on the other hand, the predominant purpose is the transfer of goods with labor incidentally involved, the transaction does constitute the sale of goods.

7. Sales: Warranty. An express common-law warranty arises when, to induce a sale, the seller makes a statement of fact representing the quality or character of the thing sold, which statement is reasonably relied upon by the buyer.

8. Sales: Warranty. An advertisement may create an express common-law warranty.

9. Sales: Breach of Warranty: Actions. The lack of privity between an ultimate consumer and manufacturer does not preclude an action by the ultimate consumer against the manufacturer for recovery of economic losses caused by the manufacturer's breach of an express common-law warranty made by it.

Thomas A. Wagoner, Grand Island, for appellants.

Patrick A. Brock of Cunningham, Blackburn, VonSeggern, Livingston & Francis, Grand Island, for appellee.

KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, and SHANAHAN, JJ.

CAPORALE, Justice.

Appellants, Albert and Mildred Herman, husband and wife, sued appellee, Bonanza Buildings, Inc., for damages resulting from the improper erection by Big Valley Builders, Inc., of a steel building, the components of which were manufactured and supplied by Bonanza. The operative petition alleges that Big Valley is the agent of Bonanza, rendering the latter liable for the defects in Big Valley's workmanship, and that Bonanza breached certain warranties it made directly to the Hermans. Trial was had without a jury. At the close of the Hermans' evidence, the trial court dismissed the suit pursuant to Bonanza's motion. The issues presented by the Hermans' assignments of error are (1) whether Big Valley was an agent of Bonanza, as claimed by the Hermans, thereby making Bonanza liable for Big Valley's defective workmanship, or whether, as claimed by Bonanza, Big Valley was an independent contractor for whose workmanship Bonanza has no responsibility, and (2) whether, if Big Valley was not the agent of Bonanza, Bonanza nonetheless breached any warranty it made to the Hermans. We affirm in part and in part reverse and remand for further proceedings.

In the posture of the case the controlling rule is that a court may decide an issue as a matter of law only when the facts are such that reasonable minds can draw but one conclusion. Porter v. Jensen, 223 Neb. 438, 390 N.W.2d 511 (1986); Poppe v. Petersen, 221 Neb. 877, 381 N.W.2d 534 (1986); Foltz v. Northwestern Bell Tel. Co., 221 Neb. 201, 376 N.W.2d 301 (1985).

It is important not to confuse the function of the trial court in ruling on a motion to dismiss with its function in adjudicating the controversy when acting as the finder of fact in an action at law tried without a jury. In sustaining a motion to dismiss, the court resolves the controversy as a matter of law. Hennings v. Schufeldt, 222 Neb. 416, 384 N.W.2d 274 (1986); Studley v. School Dist. No. 38, 210 Neb. 669, 316 N.W.2d 603 (1982). In considering the evidence for that purpose, the party against whom the motion to dismiss is made is entitled to have every controverted fact resolved in his or her favor and to have the benefit of every inference which can reasonably be drawn from the evidence; if there is any evidence in favor of the party against whom the motion is made, the case may not be decided as a matter of law. In re Estate of Price, 223 Neb. 12, 388 N.W.2d 72 (1986); Kahrhoff v. Kohl, 219 Neb. 742, 366 N.W.2d 128 (1985). On the other hand, in rendering judgment as the finder of fact, the trial court resolves credibility issues and weighs the evidence in the same manner as does a jury. After so doing, the trial court reaches findings of fact which are equivalent to a jury's verdict. Such findings will not be overturned on appeal unless clearly wrong. Hennings v. Schufeldt, supra; Studley v. School Dist. No. 38, supra.

Our task, then, is to determine whether the evidence presents a question of fact. If so, the trial court erred in sustaining Bonanza's motion to dismiss at the close of the Hermans' evidence; if not, the trial court correctly sustained Bonanza's motion.

The record establishes that in mid-1980 Mr. Herman, finding himself in need of a building, responded to an advertisement for Bonanza buildings by calling the long-distance telephone number given. The person answering the call took his name and telephone number and advised that the dealer in Kearney would contact him.

Thereafter, Kurt Lauer, a salesman for Big Valley, which was located in Kearney, telephoned Mr. Herman and made an appointment to meet at the latter's house to discuss the type of building Mr. Herman wanted. At this meeting Lauer showed Mr. Herman a brochure which prominently displayed the Bonanza name and logotype and described various types of Bonanza buildings. The brochure stated that the unique engineering of the product provided the freedom to design a building best suited to the buyer's individual needs, and further stated:

A Building You Won't Have To Worry About.

Your new Bonanza Building is designed to be WORRY-FREE ... We back it with a Written Warranty and a Local Independent Builder.... We think your new Bonanza building is built with a lot of quality and care, so we put it in writing. With every Bonanza building comes a Written Warranty to repair or replace defective material or workmanship.... We don't worry about your Bonanza building and we don't think you should either.

Mr. Herman selected a Bonanza building, specified certain modifications, and entered into a contract whereby Big Valley undertook to erect the building, incorporating the modifications Mr. Herman specified. In exchange, Mr. Herman agreed to pay Big Valley a total price of $9,707. He thereupon drew a check payable to Big Valley for a downpayment and delivered it to Lauer.

Big Valley thereafter obtained a building permit, poured a foundation of concrete paid for by Mr. Herman as an addition to the contract, and erected the building as modified from components delivered to the site by Bonanza. The erection process took about a month, during which time Mr. Herman made a further payment to Big Valley.

After the erection was completed Mr. Herman paid Big Valley the final amount due it under the contract. At that time the owner of Big Valley presented Mr. Herman with a document entitled "Bonanza Building Warranty," which provides that "the Bonanza Builder named below" will, among other things, repair leaks. The warranty was signed by Big Valley's owner only.

The first rain following completion leaked through windows, doors, and skylights of the building. Mr. Herman contacted Lauer, who attempted to make some...