Hill v. BASF Wyandotte Corp., 80-1619

• Decision Date: 15 December 1982
• Docket Number: No. 80-1619,80-1619
• Citation: 696 F.2d 287
• Parties: 35 UCC Rep.Serv. 91 Harold Heath HILL, Appellee, v. BASF WYANDOTTE CORPORATION, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 287

696 F.2d 287

35 UCC Rep.Serv. 91

Harold Heath HILL, Appellee, v.BASF WYANDOTTE CORPORATION, Appellant.

No. 80-1619.

United States Court of Appeals Fourth Circuit.

Argued May 6, 1982.

Decided Dec. 15, 1982.

Charles E. Carpenter, Jr., Columbia, S.C.(R. Davis Howser, Richardson, Plowden, Grier & Howser, Columbia, S.C., on brief), and James M. Brailsford, III, Columbia, S.C.(Robinson, McFadden, Moore, Pope & Stubbs, Columbia, S.C., on brief), for appellant.

Terry A. Finger, Columbia, S.C.(Karl A. Folkens, William P. Donelan, Jr., Donelan & Donelan, Dudley H. Britt, Jr., Columbia, S.C., on brief), for appellee.

Before PHILLIPS and ERVIN, Circuit Judges, and ROBERT G. DOUMAR, United States District Judge, sitting by designation.

JAMES DICKSON PHILLIPS, Circuit Judge:

In this diversity case controlled by South Carolina law BASF Wyandotte Corp.(BWC), manufacturer of Basalin, an agricultural herbicide, appeals from a judgment in favor of Hill, a farmer who bought Basalin from a retailer and used it with allegedly injurious consequences to his soybean crop.A jury, finding breach of warranty running from BWC as manufacturer to Hill as ultimate purchaser under relevant provisions of the state's version of the Uniform Commercial Code(U.C.C.), awarded Hill substantial direct and consequential damages.

Concluding that BWC was bound by no warranty save that expressed in writing on the cans of herbicide purchased by Hill and that under its terms Hill's remedy for breach was limited to direct damages, we vacate the judgment and remand for a new trial limited to the issues of liability and damages for breach of the express warranty on the herbicide cans.

I

In 1977, Hill was an experienced farmer with extensive farming operations in Richland County, South Carolina.Along with other crops he grew a substantial amount of soybeans.In recent years he had used a herbicide called Treflan, produced by a manufacturing rival of BWC's, to control weeds in producing this crop.In late January or early February of 1977he met with a man named Pennington, who was a sales agent for BWC.They discussed the properties of BWC's herbicide, Basalin, which was then selling at a lower price than Treflan's.In the course of their discussions, in response to questioning by Hill, Pennington told Hill that "if you used Treflan, you [use Basalin] the same way ... the entire same way"; that "it would control the same weeds that Treflan will"; that "it would do the same way as Treflan, but it is cheaper"; "to put it down the same way, you don't have to change a thing, do it the same way."

Relying, according to his later testimony, upon these statements by Pennington, Hill decided to buy and use considerable quantities of Basalin in growing his 1977 soybean crop.BWC did not have a direct retail outlet in the area, and Hill made his purchases of Basalin from Kerr-McGee Chemical Corporation, a local agricultural chemical retailer.He made four separate purchases, the first on February 14, and the other three during April.In all he bought 365 gallons, all in 5-gallon cans, for a total purchase price of $8,382.35 which he paid in two separate installments.

On each of the cans of Basalin purchased there appeared a label containing a warranty and certain conditions of sale that included an allocation of risk, a disclaimer of any warranties other than the one expressly stated, and a limitation of remedies for breach of that warranty.¹After reading the label, Hill applied the herbicide to 1,450 acres of soybeans.He applied Treflan to approximately another 200 acres of soybeans.Following planting of this crop in May and June, Hill began in July to notice weed problems--particularly pig weed--in the Basalin fields.No corresponding problem was noted then or later in the Treflan fields.Efforts of various kinds were made to control the weed problem, but none were successful.

In the Basalin-treated fields, Hill had a bad crop, with lower yield than he had had in other years and a poorer quality that required greater-than-ordinary expense in harvesting.Ascribing this result to Basalin's failure to control weeds as warranted, Hill brought this action against BWC alleging breach of warranty and misrepresentation, and seeking $48,257.35 in direct and consequential damages.

BWC defended on several grounds: inter alia, that Hill's use of Basalin was not the proximate cause of any crop loss sustained; that BWC's sole warranty was that expressed on the label and that it was not breached; and that, in any event, under terms of the warranty, Hill's remedy was limited to recovery of the purchase price.

The case was first tried to Judge Chapman and a jury.On trial the evidence of causation was substantially conflicting.Hill's evidence indicated a significant difference in the yields on the Basalin-treated and Treflan-treated crops, and included testimony suggesting that Treflan in general was rated by experts as a better product and that other farmers in the area had had similar problems with Basalin during the same crop year.On the other hand, BWC's evidence included, inter alia, testimony that the two products were essentially identical in chemical composition and were rated of equal quality by experts; that the 1977 crop year had been a bad one generally in the area, with a drought at the critical time that might well have caused any diminished yield experienced; and that a significant portion of the Basalin-treated crop involved a seed variety more vulnerable to the drought conditions than was the variety used in Hill's smaller Treflan-treated crop.

Judge Chapman ruled as a matter of law that the only warranties in issue were the express warranties on the Basalin can which, by virtue of the applicable state U.C.C. provision, S.C.Code Ann. Sec. 36-2-318(Law. Co-op. 1976), ² extended BWC's warranty beyond the retailer to Hill as a consumer; and that if breach of that warranty was proven, Hill's remedy was limited by its terms to direct damages as measured by the purchase price.On that basis the case was submitted to the jury which was then unable to reach a verdict, resulting in the declaration of a mistrial.

The case was then retried to Judge Anderson and a jury on substantially the same evidence.At the conclusion of the retrial, Judge Anderson, in direct disagreement with Judge Chapman's earlier critical rulings, instructed the jury that it might find BWC liable on the oral warranty of Pennington as well as any express warranty on the cans of Basalin, and that it might award consequential as well as direct damages if it found breach of warranty and damages proximately caused by the breach.This jury returned a general verdict for Hill of $209,725.

Following the denial of various post-trial motions by BWC, this appeal was taken.

II

BWC's contentions on appeal are essentially that Judge Anderson erred in his two rulings by which, in specific disagreement with those earlier made by Judge Chapman, he allowed the jury to treat Pennington's oral representations as an oral express warranty binding on BWC, and to award consequential as well as direct damages for any breach found.³We agree that there was error of law in both respects.

A

BWC contends that Pennington's oral representation did not amount to a warranty binding upon BWC for two reasons.First, as a matter of law, that the representation amounted to no more than sales puffing, as Judge Chapman had ruled on the first trial.Second, that in any event, BWC's express disclaimer of any express or implied warranties other than those expressed on the label was binding as a matter of law upon Hill as purchaser.

While we would be disposed to agree that under S.C.Code Ann. Sec. 36-2-313(2)(Law.Co-op.1976) Pennington's representation was simply "a statement purporting to be merely the seller's opinion or commendation of the goods [that did] not create a warranty,"we rest decision primarily on the conclusion that, in any event, Hill was bound by the disclaimer on the label of any warranties but those expressly stated there.Though on trial Hill attempted to discount the subjective effect of the label's contents upon him as he read them, he conceded that he did read the label before using any of the Basalin.There is, therefore, no question of either his actual notice of the disclaimer's existence as an express condition of the sale or that he was invited by another provision of the label to repudiate by return of the product if unwilling to accept the sale conditions.

Under controlling provisions of the U.C.C. as enacted in South Carolina, S.C.Ann.Code Sec. 36-2-202(Law.Co-op.1976)(parol or extrinsic evidence), ⁴ and of the express conditions of the particular sale, the Pennington oral statements could not, as a matter of law, be allowed to vary the terms of the conditions of sale and warranty on the product label, seeInvestors Premium Corp. v. Burroughs Corp., 389 F.Supp. 39(D.S.C.1974)(construing predecessor statute), which alone controlled the legal relations of the parties to the executed sale.

Hill seeks to avoid the controlling effect of these statutory provisions by characterizing the disclaimer on the product label as a unilateral attempt by a seller following execution of a contract of sale or a consummated sale to disclaim express warranties made in conjunction with the sale or contract.The caseshe cites in support of this proposition, e.g., Klein v. Asgrow Seed Co., 246 Cal.App.2d 87, 54 Cal.Rptr. 609(Cal.Ct.App.1966), do support it, but they and that proposition are simply inapposite to the facts of this case.They deal with the effect of a post-contract or post-sale attempt unilaterally to avoid, by a later disclaimer, warranties embodied in or arising from an executory contract of sale or a completed sale.That is simply not the situation here in issue.

B

The district court also erred in allowing the jury to award consequential damages in the face of...