Martin Rispens & Son v. Hall Farms, Inc.

• Decision Date: 22 September 1993
• Docket Number: No. 14S01-9309-CV-1021,14S01-9309-CV-1021
• Citation: 621 N.E.2d 1078
• Parties: 22 UCC Rep.Serv.2d 89, Prod.Liab.Rep. (CCH) P 13,717 MARTIN RISPENS & SON and Petoseed Company, Inc., Appellants, (Defendants Below), v. HALL FARMS, INC., Appellee. (Plaintiff Below).
• Court: Indiana Supreme Court

Page 1078

621 N.E.2d 1078

22 UCC Rep.Serv.2d 89, Prod.Liab.Rep. (CCH) P 13,717

MARTIN RISPENS & SON and Petoseed Company, Inc., Appellants, (Defendants Below), v. HALL FARMS, INC., Appellee. (Plaintiff Below).

No. 14S01-9309-CV-1021.

Supreme Court of Indiana.

Sept. 22, 1993.

Michael Rosiello, Stanley C. Fickle, Jan M. Carroll, Barnes & Thornburg, Indianapolis, for Petoseed Co., Inc. and Martin Rispens & Son, Inc.

Stephen L. Williams, Mann Chaney Johnson Goodwin & Williams, Terre Haute, Paul B. Ledford, Vincennes, for Hall Farms, Inc.

ON PETITION TO TRANSFER

KRAHULIK, Justice.

We grant transfer to address whether defendants, Martin Rispens & Son, and Petoseed Company, Inc. (Appellants-Defendants below) are entitled to summary judgment on certain warranty, negligence and strict liability in tort claims filed by Hall Farms, Inc. (Appellee-Plaintiff Below). Martin Rispens & Son v. Hall Farms, Inc. (1992), Ind.App., 601 N.E.2d 429.

Facts

The facts pertinent to Hall Farms' petition are as set forth in the opinion of the Court of Appeals:

Hall Farms, Inc., farms about 1,400 acres of mostly rented land in Knox County, Indiana. It produces grain, row crops, hay, watermelons, and cantaloups and raises a few hogs and cows. In 1989, Hall Farms employed between 116 and 170 people; that year's watermelon and cantaloup crop generated some $440,000 in gross revenues, despite the fruit blotch. Much of Hall Farms' past success in the melon market is attributable to the Prince Charles variety watermelon seed, known for its high yield and resistance to disease. Hall Farms had used the variety since 1982 or 1983.

In August of 1988, Hall Farms ordered 40 pounds of Prince Charles seeds from Rispens at a cost of $85.40 per pound. As requested, Rispens delivered the seeds, packaged in sealed one pound cans, in February 1989. Hall Farms stored the unopened cans until early April, at which time the watermelon seeds were germinated in two greenhouses.

On April 25th Mark Hall noted that about 15 seedlings were spotted with small yellow lesions. Suspecting gummy stem blight, a seed borne disease, Hall contacted a neighbor who, in turn, contacted Dr. Richard Latin, a plant pathologist from Purdue University. After transporting samples to the Purdue laboratory, Dr. Latin concluded the problem was neither gummy stem blight nor any fungus.

The lesions did not affect the plants' growth, however, and no plants died. The asymptomatic seedlings were transplanted to the fields between May 8th and 10th. Mark Hall monitored the plants every three or four days for the next several weeks, as was his custom. Although some looked a little "funny," they were nevertheless "growing like mad." Record at 651. On July 5th or 6th, Hall spotted a watermelon blemished by a small purple blotch. By July 15th, the blotch was "spreading like wildfire." Record at 662. By harvest time ten days later, a significant portion of the watermelon crop had been ruined.

Hall Farms left most of the blotched Prince Charles watermelons in the fields. They were eventually plowed under in early September in preparation for the planting of oats and then soybeans. Volunteer plants appeared the next summer, but Mark Hall killed them with Blazer, a herbicide, before Dr. Latin could examine them. Hall Farms suffered no watermelon blotch in 1990, even in fields that were infected the year before. During its investigation, Hall Farms learned the Prince Charles variety seeds it planted came from Petoseed's Lot Nos. 1018 and 5024. Lot 1018 was grown in China; lot 5024 was grown in Mexico.

Based on his discussions with Dr. Latin, who was of the opinion the bacteria causing the fruit blotch were introduced into Indiana through the Prince Charles seeds, Hall reasoned the Chinese or Mexican fields must have had the fruit blotch because his plants had it. Petoseed, a part of Hall Farms' argument goes, was therefore culpable to the extent it knew or should have known the fields were infected and yet harvested the seeds of the infected watermelons for resale to businesses like his.

Rispens, 601 N.E.2d at 432-3 (footnote omitted).

Hall Farms sued Rispens (the seed retailer) and Petoseed (the seed grower) seeking a recovery on theories of strict liability in tort, negligence, and breach of express and implied warranties. After the trial court denied defendants' motions for summary judgment, defendants brought an interlocutory appeal. For Petoseed, the Court of Appeals ordered the trial court to enter summary judgment on the negligence and breach of warranty claims. The Court affirmed denial of summary judgment on the product liability claim because a question of fact existed about whether the damage was sudden and major. For Rispens, the Court of Appeals ordered the trial court to enter summary judgment on the strict liability, negligence, and all but one of the warranty counts. Summary judgment was denied with respect to one express warranty claim. Additionally, the Court held that Rispens and Petoseed had effectively limited their liability to the cost of the seed, whether the theory was contract or tort.

Plaintiff Hall Farms seeks reinstatement of the trial court's denial of summary judgment on all issues. We grant transfer in order to discuss and decide the interrelationship of the three product liability theories, viz. warranty, strict liability, and negligence.

I. Warranty Claims

A. Express Warranties

Hall Farms argues that the Court of Appeals erred (1) in deciding the non-existence of certain express warranties as a matter of law, and (2) in holding that certain language on the Petoseed can and the Rispens order form did not create express warranties.

Where an agreement is entirely in writing, the question of whether express warranties were made is one for the court. Woodruff v. Clark County Farm Bureau Coop. Ass'n. (1972), 153 Ind.App. 31, 50, 286 N.E.2d 188, 199. Here, all the representations upon which Hall Farms relies were in writing. Therefore, the Court of Appeals correctly determined the existence of express warranties as a matter of law.

Hall Farms' warranty claims arise out of the sale of goods and, thus, those claims are governed by Article 2 of the Uniform Commercial Code ("UCC"), Ind.Code Ann. Sec. 26-1-2-101 through Sec. 26-1-2-725 (West 1980 & Supp.1992). The UCC provides for the creation of express warranties. ¹ Ind.Code Sec. 26-1-2-313.

An express warranty requires some representation, term or statement as to how the product is warranted. Candlelight Homes, Inc. v. Zornes (1981), Ind.App., 414 N.E.2d 980, 983. Stated another way, an express warranty may be created if the seller asserts a fact of which the buyer is ignorant, but not if the seller merely states an opinion on a matter on which the seller has no special knowledge and on which the buyer may be expected also to have an opinion and to exercise his judgment. Royal Business Machines, Inc. v. Lorraine Corp., 633 F.2d 34, 41 (7th Cir.1980). Thus, a seller's factual statement that a machine had a new engine constituted an express warranty. Perfection Cut, Inc. v. Olsen (1984), Ind.App., 470 N.E.2d 94, 95. Assurances by a seller that carpet would be replaced if any defects surfaced within one year of purchase was sufficient to create an express warranty. Carpetland U.S.A. v. Payne (1989), Ind.App., 536 N.E.2d 306, 308.

By contrast, statements of the seller's opinion, not made as a representation of fact, do not create an express warranty. Thompson Farms, Inc. v. Corno Feed Products (1977), 173 Ind.App. 682, 708, 366 N.E.2d 3, 18; James J. White & Robert S. Summers, 1 Uniform Commercial Code Sec. 9-4, at 445 (3d ed. 1988) (hereafter "White & Summers "). The statement that a product "is the best" is simply puffing which does not create an express warranty. Thompson Farms, 173 Ind.App. at 708, 366 N.E.2d at 18.

Petoseed. The label on the Petoseed cans of Prince Charles watermelon seeds states that they are "top quality seeds with high vitality, vigor and germination." This printed label is the sole basis for Hall Farms' express warranty claims against Petoseed.

Hall Farms equates the phrase "top quality seeds" with the statement that the goods were "in good order, condition and repair," found to be an express warranty in Continental Sand & Gravel, Inc. v. K & K Sand & Gravel, Inc., 755 F.2d 87, 90-91 (7th Cir.1985), and with the statement that a truck was "road ready," held to be an express warranty in Wiseman v. Wolfe's Terre Haute Auto Auction, Inc. (1984), Ind.App., 459 N.E.2d 736, 737. We do not agree. The phrase contains no definitive statement as to how the product is warranted or any assertion of fact concerning the product, but is merely the opinion of Petoseed that the seeds are "top quality." The Court of Appeals correctly concluded that the statement "top quality seeds" is a "classic example of puffery." 601 N.E.2d at 435.

Hall Farms also argues that the Court of Appeals erred in holding that, although the phrase "with high vitality, vigor and germination" constituted an express warranty, Petoseed did not breach this warranty because the growth of the seeds conformed to the affirmation on the label. 601 N.E.2d at 435. This phrase is a promise that the seeds will perform in a certain manner; it is not simply the opinion of the seller. However, we are not able to determine as a matter of law whether this express warranty was breached. On the one hand, Petoseed asserts that the promise made was only that the seeds would germinate and grow, which according to Mark Hall, they did. On the other hand, Hall Farms asserts that the presence of the disease inhibited the vitality and vigor with which the plants grew. We agree with Hall Farms that the issue of whether the seeds which carried the watermelon fruit blotch had the capacity for natural growth and survival is one for the finder of fact. Thus, summary judgment is not appropriate on this express warranty claim.

Rispens. Rispens'...