Latimer v. William Mueller & Son, Inc.

• Decision Date: 20 May 1986
• Docket Number: 79176,Docket Nos. 79175
• Citation: 386 N.W.2d 618,1 UCC Rep.Serv.2d 1128,149 Mich.App. 620
• Parties: Alan D. LATIMER, Plaintiff-Appellee, v. WILLIAM MUELLER & SON, INC., Defendant-Appellee, Third-Party Plaintiff-Appellant, v. CONIDA WAREHOUSES, INC., Third-Party Defendant-Appellant, Fourth-Party Plaintiff-Appellant, and Cross-Appellee, v. C & B CATTLE COMPANY Fourth-Party Defendant-Appellee and Cross-Appellant. Jack HECKROTH, Plaintiff-Appellee, v. WILLIAM MUELLER & SON, INC., Defendant-Appellant, Third-Party Plaintiff-Appellant, v. CONIDA WAREHOUSES, INC., Third-Party Defendant-Appellant, Fourth-Party Plaintiff-Appellant, and Cross-Appellee, v. C & B CATTLE COMPANY, Fourth-Party Defendant-Appellee and Cross-Appellant. 149 Mich.App. 620, 386 N.W.2d 618, 1 UCC Rep.Serv.2d 1128
• Court: Court of Appeal of Michigan — District of US

Page 618

386 N.W.2d 618

Alan D. LATIMER, Plaintiff-Appellee, v. WILLIAM MUELLER & SON, INC., Defendant-Appellee, Third-Party Plaintiff-Appellant, v. CONIDA WAREHOUSES, INC., Third-Party Defendant-Appellant, Fourth-Party Plaintiff-Appellant, and Cross-Appellee, v. C & B CATTLE COMPANY Fourth-Party Defendant-Appellee and Cross-Appellant.

Jack HECKROTH, Plaintiff-Appellee, v. WILLIAM MUELLER & SON, INC., Defendant-Appellant, Third-Party Plaintiff-Appellant, v. CONIDA WAREHOUSES, INC., Third-Party Defendant-Appellant, Fourth-Party Plaintiff-Appellant, and Cross-Appellee, v. C & B CATTLE COMPANY, Fourth-Party Defendant-Appellee and Cross-Appellant.

Docket Nos. 79175, 79176.

149 Mich.App. 620, 386 N.W.2d 618, 1 UCC Rep.Serv.2d 1128

Court of Appeals of Michigan.

Submitted Aug. 7, 1985.

Decided March 4, 1986.

Released for Publication May 20, 1986.

[149 MICHAPP 625] Cubitt, Cubitt & Trowhill by Dale Cubitt, Bad Axe, for plaintiff-appellee.

Smith & Brooker, P.C. by Mona C. Doyle, Richard G. Smith, and James W. Tarter, Bay City, for Conida Warehouses, Inc.

Lambert, Leser, Herbert, Dahm, Giunta & Cook, P.C. by Peter F. Dahm, Bay City, for William Mueller & Son, Inc.

Seavitt, Westcott & Stowe by Michael J. Yockey, Southfield, for C & B Cattle Co.

Before HOOD, P.J., HOLBROOK, and KERWIN ^*, JJ.

HOOD, Presiding Judge.

These consolidated appeals arise out of breach of warranty claims made by plaintiffs, Alan D. Latimer and Jack Heckroth involving the sale of defective bean seed by defendant and third-party plaintiff William Mueller & Son, Inc (hereinafter Mueller). Following a jury verdict in favor of plaintiffs, Mueller was awarded partial indemnity from third-party defendant Conida Warehouses, Inc. (hereinafter Conida). Mueller and Conida appeal as of right from the verdict and judgment. C & B Cattle Company (hereinafter C & B) cross-appeals.

[149 MICHAPP 626] Each of the plaintiffs is a farmer of land located in Tuscola County, Michigan. In the winter of 1976 each placed an order for Idaho grown Manitou light red kidney bean seed with Mueller, a local retailer of seed.

Mueller purchased the seed from Conida. The seed supplied by Conida, "lot 112", was grown by C & B Cattle Company in Idaho from parent seed supplied by Conida. The seed crop was inspected by the Idaho Department of Agriculture and by Conida's and C & B's employees.

Conida packaged the seeds in bags supplied by Mueller and attached three tags to the bags. One tag set forth the germination of the seed and its purity. The second tag, the "green tag", was provided by the State of Idaho and indicated that, pursuant to inspection by the Idaho Department of Agriculture, the seed met Idaho standards for field and windrow inspection. The third tag was a disclaimer of warranties expressly limiting Conida's liability to the purchase price of the seed and disclaiming any warranties for merchantability or fitness for a particular purpose.

The seed was shipped directly from Conida to Mueller in April of 1977. The seed was not thereafter tested for bacterial diseases prior to distribution by Mueller to plaintiffs. Tests were not conducted on the seed because the state laboratories were then closed for the year and because testing of the seed, which had a good reputation for not carrying bacterial diseases, was generally regarded in the trade as unnecessary.

The seed was planted by Latimer and Heckroth between mid-May and early June of 1977. During late June or early July, plaintiffs noticed a yellowing of the young bean plants. The plants were examined and found to be suffering from "internal halo blight", a seed-borne bacterial disease. In [149 MICHAPP 627] spite of attempts to control the disease On June 23, 1980, Heckroth filed a complaint against Mueller for breach of express and implied warranties. A similar complaint was filed by Latimer on June 25, 1980. Plaintiffs alleged that Mueller had expressly warranted the bean seed to be free from disease and had impliedly warranted to plaintiffs that the seed was suitable for planting on plaintiffs' farms.

crop production and quality were substantially reduced because of the blight.

Mueller answered the complaints and filed a third-party complaint against Condia in each of the actions. Mueller asserted a right to indemnification or contribution from Conida for any liability incurred by Mueller arising out of the matters set forth in plaintiffs' complaints. According to Mueller, Conida was primarily and actively responsible for any of the alleged breaches of warranty or damages to plaintiffs and Mueller was only secondarily or passively responsible.

Conida generally denied liability for the alleged breaches of warranty and asserted, as an affirmative defense, that the warranty tag on the beans limited its liability, if any, to the purchase price of the seed. In addition, Conida filed in each of the actions a complaint against C & B, seeking indemnity and contribution from C & B on the basis that the seed-transmitted disease was the result of C & B's negligence. These complaints were amended to include allegations that C & B had breached express and implied warranties to Conida.

C & B filed motions for accelerated judgment based on the grant of a directed verdict in favor of C & B by the Gratiot Circuit Court on an identical indemnity claim based on negligence filed by Conida against C & B. See Mallory v. Conida Warehouses, Inc., 134 Mich.App. 28, 350 N.W.2d 825 [149 MICHAPP 628] (1984). According to C & B, the directed verdict in Mallory, which arose from the purchase of bean seed from the same "lot 112", collaterally estopped Conida from asserting its negligence claim against C & B in the Latimer and Heckroth actions. Conida answered that collateral estoppel did not apply because the directed verdict in Mallory was granted after opening statement but prior to the entry of any evidence.

Shortly after the Latimer and Heckroth actions were consolidated, C & B filed a motion for summary judgment arguing that Conida had failed to state a claim for negligence or breach of express or implied warranties.

After a hearing, the trial court granted summary judgment to C & B on Conida's implied warranty claim, finding that no "sale" of seed occurred by C & B to Conida as the parent seed had been supplied by Conida and the seed crop itself remained the property of Conida at all times. The trial court also granted summary judgment in favor of C & B on the express warranty claim because the claim was not properly pled. The trial court, however, denied summary judgment on the negligence claim.

By special verdict, the jury found that Mueller had breached express and implied warranties of merchantability. The jury awarded $31,457.52 in damages to Heckroth and $28,943 in damages to Latimer. The jury further found in each case that 25 percent of the damages were attributable to Mueller's breach of an express warranty, 25 percent were attributable to Mueller's breach of implied warranty, and 50 percent were attributable to Conida's breach of implied warranty. On the indemnity claim by Conida against C & B, the jury determined that of the 50 percent of plaintiffs' damages attributable to Conida 50 percent of that [149 MICHAPP 629] amount was caused by Conida's breach of implied warranty, 25 percent was caused by Conida's negligence, and 25 percent by C & B's negligence.

Pursuant to hearing on the parties' trial and post-trial motions, Mueller's motion for a directed verdict on plaintiffs' claims for breach of express warranty was denied as well as Conida's motion for a directed verdict on the basis of the disclaimer tags attached to the bags of seed. The trial court also found that the evidence was sufficient to submit to the jury the question of whether Mueller had breached an implied warranty to plaintiffs and reaffirmed A judgment was entered by the trial court on June 18, 1984, awarding plaintiffs damages and interest against Mueller and providing that Mueller could recover from Conida 75% of the sums awarded to plaintiffs. Conida's complaint against C & B was dismissed.

its prior determination that collateral estoppel did not preclude Conida from asserting its negligence action against C & B. Finally, the trial court ruled that Idaho law had been properly applied in regard to Conida's indemnity claim against C & B and that under Idaho law Conida's negligence claim against C & B would be barred because of Conida's own negligence.

WAS THERE SUFFICIENT EVIDENCE TO SUPPORT THE JURY'S VERDICT

THAT MUELLER WAS LIABLE TO LATIMER FOR BREACH OF

EXPRESS WARRANTY?

After plaintiffs had rested their respective cases, Mueller moved for a partial directed verdict on plaintiff Latimer's express warranty claim on the basis of insufficient evidence. Mueller's motion was denied by the trial court.

A motion for directed verdict may only be granted when no factual question exists upon [149 MICHAPP 630] which reasonable minds can differ. Caldwell v. Fox, 394 Mich. 401, 407, 231 N.W.2d 46 (1975). In reviewing a trial court's denial of a motion for directed verdict, this Court views the evidence in the light most favorable to the nonmoving party to determine whether a prima facie case has been established. Id. See also May v. Parke, Davis & Co., 142 Mich.App. 404, 411, 370 N.W.2d 371 (1985).

Section 2313 of the Uniform Commercial Code provides that express warranties are created by a seller upon:

"(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

"(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

"(c) Any sample or model which is made part of the basis of the bargain creates an express warranty that the whole of the good shall conform to the...