Hill v. BASF Wyandotte Corp.
| Decision Date | 20 January 1984 |
| Docket Number | No. 22035,22035 |
| Citation | 311 S.E.2d 734,280 S.C. 174 |
| Court | South Carolina Supreme Court |
| Parties | , 38 UCC Rep.Serv. 1254 Harold Heath HILL, Plaintiff, v. BASF WYANDOTTE CORPORATION, Defendant. |
Dudley H. Britt, Terry A. Finger and William P. Donelan, Jr., Columbia, and Philip T. Lacy, Richmond, Va., for plaintiff.
Charles E. Carpenter, Jr., and R. Davis Howser, Richardson, Plowden, Grier & Howser, Columbia, for defendant.
This case comes before us as a certified question from the United States District Court, District of South Carolina, pursuant to Supreme Court Rule 46.
The question presented is as follows:
Given the distinction between (1) actual or direct and (2) consequential damages as set forth in §§ 36-2-714 and 36-2-715 of the South Carolina Code of Laws, 1976, as amended, what is the measure of actual damages in a herbicide failure case where there is a valid limitation of consequential, special or indirect damages?
This is a breach of warranty case involving an alleged herbicide failure which caused crop damage.
Plaintiff Hill (Farmer) purchased a quantity of the herbicide, Basalin, from a retail distributor. Basalin is manufactured by defendant BASF Wyandotte Corporation (BWC).
Among other things, to each can of Basalin there were attached the following statements:
1) "BWC" warrants that this product conforms to the chemical description on the label and is reasonably fit for the purpose referred to in the Directions for Use subject to the inherent risks referred to above.
2) In no case shall "BWC" or the Seller be liable for consequential, special or indirect damages resulting from the use or handling of this product, and
3) Read "CONDITIONS OF SALE AND WARRANTY" before buying or using. If terms are not acceptable, return product at once, unopened.
Farmer alleges that he used Basalin on approximately 1,450 acres of soybeans and another herbicide, Treflan, on approximately 200 acres. He further alleges that although there was a severe drought that year, the Treflan treated crops were significantly better than the Basalin crops both in quality and yield per acre.
Farmer initially brought suit in United States District Court on oral and written warranties for damages. A jury awarded him $207,725.00. BWC appealed and the Fourth Circuit Court of Appeals reversed and remanded the case, holding that only the written warranties on the labels of the product apply and that the limitation of remedies quoted above is valid. Hill v. BASF Wyandotte Corp., 696 F.2d 287 (4th Cir.1982).
In footnote 6 the court stated:
We express no opinion as to whether under subsections (1) and (2) of § 36-2-714 and on the evidence that may be adduced on retrial the appropriate measure of damages would be the purchase price of the herbicide or some other measure.
This question was certified to us by the trial court after remand.
Ordinarily, S.C.Code Ann. § 36-2-714(2) (1976) is controlling as the measure of damages in a breach of warranty case. This section provides:
(2) The measure of damages for breach of warranty is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount. (Emphasis added.)
We find that the formula in this subsection is inapplicable to a herbicide failure case. This formula is most appropriate where the nonconforming good can be repaired or replaced and value (both as warranted and as accepted) can be defined with certainty.
A herbicide failure is a latent defect in the product. There is no reasonable way a farmer can determine in advance whether a herbicide will perform as warranted. Discovery of the problem must await the development of the crop at which time it is usually too late to correct.
The value of a herbicide as warranted is difficult to define. Price and value are not equivalents. From the farmer's perspective, the value of the herbicide is a healthy crop at maturity. In the manufacturer's viewpoint, the value is its selling price.
The value as accepted is equally uncertain and difficult to define. There is no market for such goods and thus no market price. If anything, it has a negative value.
In our view, the inability of a court to ascertain with certainty the value of goods both as warranted and as accepted creates a special circumstance within the meaning of § 36-2-714(2). It is this special circumstance which removes cases of this type from the § 36-2-714(2) measure of damages into subsection (1).
Subsection (1) provides:
(1) Where the buyer has...
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...the disclaimer to be part of the bargain between the parties and therefore decline to follow the decision. See Hill v. BASF Wyandotte Corp., 280 S.C. 174, 311 S.E.2d 734 (1984). We hold the court did not err in denying Gold Kist a directed verdict on its action on the account minus the purc......
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