Joswick v. Chesapeake Mobile Homes, Inc.

• Court: Maryland Court of Appeals
• Writing for the Court: PAUL E. ALPERT, (Ret., specially assigned).
• Citation: Joswick v. Chesapeake Mobile Homes, Inc., 130 Md. App. 493, 747 A.2d 214 (Md. App. 2000)
• Decision Date: 02 March 2000
• Docket Number: No. 402,402
• Parties: Charles JOSWICK et ux. v. CHESAPEAKE MOBILE HOMES, INC., et al.

747 A.2d 214

130 Md. App. 493

Charles JOSWICK et ux. v. CHESAPEAKE MOBILE HOMES, INC., et al.

No. 402, Sept. Term, 1999.

Court of Special Appeals of Maryland.

March 2, 2000.

Andrea G. Green, Newark, DE, for appellants.

Amy Leete Leone (Robert B. Hetherington and McCarthy, Wilson & Ethridge, on the brief), Rockville, for appellee, Brigadier Homes.

Bruce G. Harris, Baltimore, on the brief, for appellee, Sterling Bank & Trust Co.

Eamonn J. Gordon, Bel Air, on the brief, for appellee, Chesapeake Mobile Homes, Inc.

Argued before MURPHY, C.J., and EYLER and PAUL E. ALPERT (Ret., specially assigned), JJ.

PAUL E. ALPERT, Judge (Ret., specially assigned).

While the Uniform Commercial Code ("U.C.C.") has been effective in Maryland for thirty-five years, occasionally a problem arises that has not yet been addressed by a Maryland appellate court. This is such a case. The Circuit Court for Harford County granted summary judgment motions for appellees Chesapeake Mobile Homes, Inc. ("Chesapeake"), Brigadier Homes of North Carolina, Inc. ("Brigadier"), and Sterling Bank and Trust Co., ("Sterling") against appellants Charles and Bridget Joswick ("the Joswicks"), who present the following question for our review, rephrased as follows:

Does an express warranty for a mobile home to be free from substantial defects of material and workmanship for twelve months with the exclusive remedy of repair or replacement constitute a warranty of future performance for purposes of implementing the discovery rule of the statute of limitations for goods governed by the commercial law article?

I. Background

This claim arises out of a purchase of a mobile home by appellants in March 1988. The order for the mobile home was placed with appellee Chesapeake, manufactured by appellee Brigadier, and financed by an installment sales agreement through appellee Sterling. It was not until February 1995, according to appellants, that they discovered that the mobile home (particularly the roof) was improperly constructed resulting in substantial damage to the interior of the home and the roof.¹

Appellants filed a claim against appellees on June 26, 1997, in the District Court for Harford County on a breach of warranty theory.² On August 14, 1997, appellee Brigadier filed a jury demand, followed by appellants' amended complaint in the Circuit Court for Harford County filed September 2, 1997. The court granted appellees separate motions for summary judgment on the ground that appellants' claims were barred by the statute of limitations on December 21, 1998, March 15, 1999, and April 8, 1999. This appeal followed.

II. Discussion

A. The Summary Judgment

The circuit court granted the motions for summary judgment concluding that, although the warranty was a warranty for future performance, appellants were barred by the statute of limitations because the defect was not discovered during the applicable warranty period.

The limited warranty at issue between appellants and appellee Brigadier provides in pertinent part:

Brigadier Homes of North Carolina, Inc., ("the Manufacturer") warrants this mobile home, including the structure, plumbing, heating, and electrical system, when purchased new, to be free from substantial defects of material and workmanship under normal use and service for a period of twelve (12) months from date of delivery to the first retail purchaser, and that the mobile home complies with statute, code, and rules in effect on date of its manufacture in the state in which the retail seller is located and in which the sale to the first retail purchaser occurred. This limited warranty does not extend to damage resulting from misuse, unauthorized repairs, additions or alterations, or improper transportation or setup or ground settlement. The Manufacturer does not warrant the tires, stove, smoke detectors, refrigerator, furnace, air conditioner, water heater, washer, dryer, dishwasher, garbage disposal, beds, furniture, or other appliances or accessories. These are warranted separately by their respective manufacturers. The Manufacturer does not warrant any appliances or equipment installed by the retail seller.

The exclusive remedy under this limited warranty is "the Manufacturer's obligation to repair or replace, at its option without cost to the purchaser, or his transferee, at the site of the mobile home, any defective part or parts within the scope of this limited warranty [emphasis added]...."

The circuit court reviewed applicable law and the language of the warranty at hand in concluding that the warranty extended to future performance. The court stated that:

It is clear from the language of defendant's... warranty that the parties intended that it should extend, at least to a limited degree, to future performance.

The court relied on the first portion of the warranty, and did not address the exclusive remedy portion in concluding that the language was "explicit and unambiguous, naming a twelve month period in which the buyer can expect the product to be free from substantial defects."

The trial court relied on the decision reached in In re Lone Star Indus., Inc., Concrete R.R. Cross Ties Litig., 776 F.Supp. 206, 219 (D.Md.1991), where a warranty providing that "Amtrak shall notify Lone Star of any breach of warranties... within one year of delivery," was found to be ambiguous to the court, thus denying summary judgment. Id. Apparently, in the instant case, there was no consideration below of the repair and replacement provisions of the warranty.

The circuit court, however, concluded that appellants' claims were still barred by the statute of limitations. The court stated that the warranty began on the "date of delivery," March 17, 1988, and continued until March 17, 1989, thus a claim for breach of warranty in the instant case was tenable until March 17, 1993, four years after the warranty expired. Plaintiffs filed their suit on August 14, 1997, which is beyond the statute of limitations for a breach of warranty claim.

The standard for appellate review of a summary judgment is whether the trial court was "legally correct." Commercial Union v. Harleysville, 110 Md.App. 45, 51, 675 A.2d 1059 (1996) (citing Baltimore Gas & Elec. Co. v. Lane, 338 Md. 34, 656 A.2d 307 (1995)). The circuit court's "legal determinations are not entitled to a presumption of correctness; this Court must apply the law as it understands the law to be." Hoffman v. United Iron & Metal Co., Inc., 108 Md.App. 117, 132, 671 A.2d 55 (1996) (citing Rohrbaugh v. Estate of Stern, 305 Md. 443, 446 n. 2, 505 A.2d 113 (1986)).

While we agree that the motions should have been granted, we shall assign different reasons for that decision as we shall discuss in Part II of this opinion. We therefore affirm the summary judgment, but on a different ground. "Ordinarily, an appellate court will not affirm a summary judgment by ruling on a ground not ruled upon by the trial court [unless] the alternative ground is one as to which the trial court had no discretion." Thomas v. City of Annapolis, 113 Md.App. 440, 450, 688 A.2d 448 (1997) (citing Maryland Cas. Co. v. Lorkovic, 100 Md.App. 333, 357, 641 A.2d 924 (1994)).

The circuit court granted the motions on the ground that the warranty did extend to future performance, but that the claim was barred by the statute of limitations because the defect was not discovered in time. We, by the same token, hold that the claim was barred by the statute of limitations but for a different reason, i.e., that it was a repair and replacement warranty, an alternative not within the trial court's discretion.³ Thus, we may affirm the summary judgment on a different ground. See Leonard v. Fantasy Imports, Inc., 66 Md.App. 404, 504 A.2d 660 (1986) (reversing the circuit court's decision to grant a summary judgment in favor of appellees, and instead granting summary judgment for appellants based on the fact that the issue was not of fact, but of law).

B. Warranty as to Future Performance

Appellants contend that their warranty was a warranty for future performance rendering suit filed within four years from the date of discovery of the defect within the applicable statute of limitations.

This case turns on whether their warranty extended to future performance because otherwise appellants' claim is barred by the statute of limitations. The mobile home purchased by appellants constituted "goods" under the Maryland Commercial Law Article, for which the applicable statute of limitations is governed by § 2-725 of the Article providing:

A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, the cause of action accrues when the breach is or should have been discovered.

We are unaware of Maryland authority determining a "warranty for future performance," thus we turn to other reputable sources for guidance. For a warranty to be considered one of future performance for purposes of § 2-725,

the terms of the warranty must unambiguously and explicitly indicate that the manufacturer is warranting the future performance of the goods for a specified period of time.

In re Lone Star Indus., Inc., Concrete R.R. Cross Ties Litig., 776 F.Supp. 206, 219 (D.Md.1991) (citing R.W. Murray Co. v. Shatterproof Glass Corp., 697 F.2d 818 (4 th Cir.1983)). The word "explicit" has been defined by the courts as

not implied merely, or conveyed by implication; distinctly stated; plain language; clear; not ambiguous; express; unequivocal.

Id. (citing Binkley Co. v. Teledyne Mid-America Corp., 333 F.Supp. 1183 (E.D.Mo.1971)).

Courts have strictly construed the definition of a warranty for future performance:

Most courts have been very harsh in determining whether a warranty explicitly extends

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