Leavitt v. Monaco Coach Corp.

• Decision Date: 29 August 2000
• Docket Number: Docket No. 213020.
• Citation: 241 Mich. App. 288,616 N.W.2d 175
• Parties: A.S. LEAVITT, Plaintiff-Appellee/Cross-Appellant, v. MONACO COACH CORPORATION, Defendant-Appellant/Cross-Appellee.
• Court: Court of Appeal of Michigan — District of US

616 N.W.2d 175

241 Mich. App. 288

A.S. LEAVITT, Plaintiff-Appellee/Cross-Appellant, v. MONACO COACH CORPORATION, Defendant-Appellant/Cross-Appellee.

Docket No. 213020.

Court of Appeals of Michigan.

Submitted November 2, 1999, at Grand Rapids.

Decided May 26, 2000, at 9:10 a.m.

Released for Publication August 29, 2000.

Law, Weathers & Richardson, P.C. (by Anthony P. Gauthier), Grand Rapids, for the plaintiff.

Dykema Gossett PLLC (by John A. Ferroli and Scott D. Broekstra), Grand Rapids, for the defendant.

Before WHITE, P.J., and WILDER and METER, JJ.

METER, J.

In this breach of warranty case, defendant appeals as of right, and plaintiff cross appeals, from an order of the trial court effectuating the jury's verdict and award of damages and awarding plaintiff legal fees both as mediation sanctions and as compensation under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, 15 USC 2301 et seq. We affirm but remand for a determination and award of plaintiff's appellate attorney fees.

In 1991, plaintiff purchased a 1992 Monaco Dynasty motor coach, with an engine upgraded to 230 horsepower. Plaintiff presented evidence that while shopping for his coach, he informed defendant of his plans to use the coach extensively for travel in mountainous areas and of his wish to avoid problems he had experienced with rented vehicles that lacked sufficient engine and braking power. Almost immediately upon receiving the vehicle, and for the years leading up to this lawsuit, plaintiff complained that his coach could not maintain ordinary highway speeds going up steep hills and that the brakes were prone to overheating while going down. Defendant performed many warranty repairs and other service, but plaintiff ultimately concluded that the engine and brakes, as a matter of design, simply were not suitable for his expressed needs, and he commenced this action.

When trial began in September 1997, plaintiff sought damages under the Uniform Commercial Code (UCC), M.C.L. § 440.1101 et seq.; MSA 19.1101 et seq., mediation sanctions under MCR 2.403(O), and attorney fees under the Magnuson-Moss Act. Plaintiff alleged inadequate performance from only the engine and brakes. Plaintiff initially named several defendants and stated several claims, but by the time trial began the only remaining defendant was Monaco Coach Corporation, and the only claim that went to the jury was the allegation that Monaco had breached an implied warranty of fitness for a particular purpose. The jury returned a verdict in favor of plaintiff in the amount of $33,730.50.

At a posttrial hearing, plaintiff petitioned for mediation sanctions and Magnuson-Moss attorney fees. The trial court awarded both, tailoring the award to cover plaintiff's legal expenses attendant to litigation with defendant only, as opposed to others who had been involved in the case, and to exclude fees attendant to developing the issue of consequential damages (the court having earlier ruled that incidental or consequential damages were not available under the terms of the warranty). The court also took care to avoid any duplication of legal fees under both the mediation rules and the Magnuson-Moss Act.

On appeal, defendant argues that plaintiff failed to create a jury-submissible question concerning breach of warranty, that the trial court improperly admitted evidence and improperly instructed the jury concerning damages, that the court accepted an improper compromise verdict, and, alternatively, that the court should have granted defendant's motion for remittitur. Defendant also argues that the court erred in awarding attorney fees under the Magnuson-Moss Act. Plaintiff argues that the trial court erred in denying double recovery of attorney fees under the mediation rules and Magnuson-Moss, and further asks this Court to award appellate attorney fees under the latter.

I Directed Verdict

In reviewing a decision on a motion for a directed verdict, this Court views the evidence in the light most favorable to the nonmoving party to determine whether there existed a factual question about which reasonable minds could differ. Oakland Hills Development Corp. v. Lueders Drainage Dist., 212 Mich.App. 284, 289, 537 N.W.2d 258 (1995).

MCL 440.2315; MSA 19.2315, a provision of the UCC, provides as follows:

Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods, there is ... an implied warranty that the goods shall be fit for such purpose.

Thus, to establish a valid warranty of fitness for a particular purpose, "the seller must know, at the time of sale, the particular purpose for which the goods are required and also that the buyer is relying on the seller to select or furnish suitable goods." Ambassador Steel Co. v. Ewald Steel Co., 33 Mich.App. 495, 501, 190 N.W.2d 275 (1971).

In this case, plaintiff testified that in order to avoid risky situations such as he had experienced before, he described to defendant's sales manager his concerns for maintaining speed and having reliable brakes while traversing mountain roads, including those east of the Sierras, at Death Valley, through the Cascades, and through Mexico. Plaintiff further testified that he told the sales manager that he desired a vehicle that, while fully loaded and towing a fully loaded car, would keep up with commercial buses. According to plaintiff, the sales manager assured him that he would have no problem with the coach's engine and that the standard brakes would be fine with no supplementation.

Plaintiff also testified that (1) he explained to the sales manager that he had had no experience with diesel engines, and (2) defendant's representatives were instrumental in convincing him that he should obtain one. Defendant argues that plaintiff did not explain his special needs for engine power with sufficient particularity to establish a warranty of fitness for a particular purpose. Defendant points out that the evidence indicates that plaintiff never negotiated for specific speed capabilities and that the coach in question could, in fact, negotiate the steepest mountain grades while fully loaded, albeit at slow speeds. However, the evidence that plaintiff communicated his wish to traverse mountain roads while keeping up with commercial buses was sufficiently specific to support a finding that plaintiff articulated to defendant his particular need for engine power. Likewise, plaintiff's testimony about having communicated his problems with brakes in the past while seeking defendant's advice in the matter, along with having described the mountainous areas in which he wished to drive the coach, was sufficient to support a finding that defendant articulated to defendant his particular braking needs.

Concerning plaintiff's reliance on defendant in selecting the coach for his special needs, defendant points to evidence that suggests that plaintiff relied primarily on his own judgment, not defendant's, in the matter. However, plaintiff's insistence that he relied mainly on defendant for the choice of engine, and for deciding against upgrading the brakes, is sufficient to support a finding that plaintiff relied on defendant's expertise in selecting a coach that suited his needs.

Because the evidence created genuine issues of material fact concerning whether defendant knew of plaintiff's particular needs and whether defendant knew that plaintiff was relying on defendant's expertise in making his selection, the trial court properly denied defendant's motion for a directed verdict.

II Damages

With regard to damages, defendant argues that the trial court erred in admitting certain testimony, in instructing the jury regarding the measure of damages, and in failing to direct the jury to differentiate between the engine and brakes as sources for any breach of warranty. We disagree.

A

Defendant objected to plaintiff's plan to have the sales representative who, operating as an employee of Holland Motor Homes, sold the coach to plaintiff testify concerning the value of the coach. Defendant conceded having had notice that this witness might appear in a lay capacity, but characterized the testimony concerning damages as "expert" and argued that this witness was not listed in discovery as an expert. The trial court ruled that because the witness "is an agent and has been all through the nature of these proceedings, and ... was instrumental in the sale of this vehicle, an agent of the defendant, I'm going to permit him to testify as to damages." The court did not indicate whether it regarded such testimony to be expert testimony, and when the witness appeared, there was no discussion concerning whether he did so with the formal status of an expert.

It remains within a trial court's sound discretion to admit testimony from a witness even where the witness was not identified in the discovery process. See, e.g., Herrera v. Levine, 176 Mich.App. 350, 355, 439 N.W.2d 378 (1989), and Pollum v. Borman's, Inc., 149 Mich.App. 57, 61, 385 N.W.2d 724 (1986).

[A]n abuse of discretion will be found when the decision is "so palpably and grossly violative of fact and logic that it evidences not the exercise of will but perversity of will, not the exercise of judgment but defiance thereof, not the exercise of reason but rather of passion or bias."

[Dacon v. Transue, 441 Mich. 315, 329, 490 N.W.2d 369 (1992), quoting Spalding v. Spalding, 355 Mich. 382, 384-385, 94 N.W.2d 810 (1959).] Defendant argues that because the trial court had dismissed Holland Motor Homes from this case on the ground that Holland was not defendant's agent, the court erred in allowing Holland's salesperson to testify on the ground that that witness was in fact defendant's agent. However, defendant did not raise that ground for objection below, thus waiving it for purposes of appeal. MRE 103(a...