Mauk v. Mercury

Decision Date28 March 2011
Docket NumberNo. A10A2320.,A10A2320.
Citation74 UCC Rep.Serv.2d 125,11 FCDR 1110,709 S.E.2d 353,308 Ga.App. 864
CourtGeorgia Court of Appeals


T. Michael Flinn, Carrollton, for appellant.Owen, Gleaton, Egan, Jones & Sweeney, Philippa V. Ellis, Ana M. Martinez, Melissa Phillips Reading, Casey Gilson, Karen Rebecca Dunbar, Stacey K. Hydrick, Atlanta, for appellees.BARNES, Presiding Judge.

Sheila Mauk bought a new Mustang in May 2007, and within three weeks brought it back to the dealership, Pioneer Ford Mercury, with complaints about the transmission. Over the next nine months Mauk brought the car back to the dealer for service eight times, but her complaints were not resolved, and in February 2008 she sent a letter to Pioneer, Ford Motor Company, and the lender SunTrust Bank seeking to revoke her acceptance of the car under OCGA § 11–2–608 of the Uniform Commercial Code. Mauk then filed a complaint against the three entities in May 2008, seeking damages and relief from her installment contract, and this litigation ensued. The trial court granted summary judgment to Pioneer and SunTrust on Mauk's claim for damages from Pioneer's failure to accept her revocation of the contract, and Mauk appeals. For the reasons that follow, we reverse the trial court's summary judgment to Pioneer and SunTrust on this claim.1 In so doing, we overrule the case on which the trial court understandably relied, Scott v. Team Toyota, 276 Ga.App. 257, 259(4), 622 S.E.2d 925 (2005).

On appeal we review the trial court's grant of summary judgment de novo to determine whether the evidence, viewed in the light most favorable to the nonmoving party, demonstrates a genuine issue of material fact. Summary judgment is proper only when no issue of material fact exists and the moving party is entitled to judgment as a matter of law. Ford v. Bank of America Corp., 277 Ga.App. 708, 627 S.E.2d 376 (2006). When reviewing the grant or denial of a motion for summary judgment, this court conducts a de novo review of the law and the evidence. Wachovia Bank v. Moody Bible Inst. of Chicago, 283 Ga.App. 488, 489, 642 S.E.2d 118 (2007).

1. Mauk bought a new Mustang in May 2007, financing it with a six-year loan from SunTrust with payments of $587 per month. In February 2008, Mauk's attorney sent a certified letter to Pioneer, SunTrust, and Ford revoking her acceptance of the car. In the letter, Mauk sought the return of the money she had paid for the car to date and also sought $1,000 in attorney fees to settle all of her claims against the three entities. The trial court held that this revocation was not an “unconditional tender” of goods back to the seller, which we held in Scott was required to revoke the acceptance of noncomforming goods under OCGA § 11–2–608 of the UCC.

Scott reviewed both a claim for damages due to fraud and a claim for damages resulting from the delivery of nonconforming goods. In Division 1, we held that a party electing to rescind a contract for fraudulent inducement under OCGA § 13–4–60 must tender any benefits received before bringing the action. 276 Ga.App. at 258(1), 622 S.E.2d 925. We then held that the offer to restore the consideration received under the contract must be “unconditional and certain.” In Division 4, addressing Scott's UCC claim under OCGA § 11–2–608, we held that she “did not tender the [goods] back to [the seller] in accordance with the requirements of Georgia law,” and referred to Division 1. Id. at 259(4), 622 S.E.2d 925.

Mauk does not claim fraud, and therefore the requirements for contract rescission on that basis are not before us. As to Mauk's UCC claim, however, the buyer need not tender nonconforming goods as a condition precedent to a claim based on a revocation of acceptance theory of recovery, much less make an unconditional tender. OCGA § 11–2–608 provides:

(1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it....

(2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it.


(Emphasis supplied.) The condition precedent to a claim for damages due to the seller's failure to accept the buyer's contract revocation under OCGA § 11–2–608(2) is that the buyer give the seller notice of the revocation within a reasonable time and before the condition of the goods changes substantially from unrelated causes. See Fiat Auto U.S.A. v. Hollums, 185 Ga.App. 113, 114–115(3), 363 S.E.2d 312 (1987) (letter recounting car troubles and asking manufacturer to take back the car and refund money paid was sufficient to constitute revocation of acceptance).

Further, other provisions of the UCC support the conclusion that tender is not required to revoke acceptance under OCGA § 11–2–608. OCGA § 11–2–608(3) gives the buyer the same rights and duties regarding the goods as she would have if she had rejected them, and OCGA § 11–2–602(2)(b) requires the buyer to hold the nonconforming goods with reasonable care for a time sufficient to permit the seller to remove them. Finally, if a buyer justifiably revokes her acceptance, OCGA § 11–2–711(3) grants the buyer a security interest in the noncomforming goods for certain payments and expenses incurred, and even allows the buyer to resell the goods under certain circumstances. All of these provisions are inconsistent with requiring a tender to revoke a contract for the sale of nonconforming goods under the UCC.

Additionally, in the context of a sale of goods, the UCC specifically addresses the seller's duty to tender the goods and the seller's right to cure a nonconforming tender of goods if the contracted time for performance has not expired. OCGA §§ 11–2–507 and 11–2–508. We thus regard the absence of a tender requirement in OCGA § 11–2–608(2) as a deliberate matter of considered choice. See Padgett v. City of Moultrie, 229 Ga.App. 500, 503(1), 494 S.E.2d 299 (1997); Dept. of Human Resources v. Hutchinson, 217 Ga.App. 70, 72(1), 456 S.E.2d 642 (1995).

While we have found no Georgia cases specifically holding that tender is not required to revoke the acceptance of goods under OCGA § 11–2–608 of the UCC, other jurisdictions have addressed the issue directly.

A tender of the goods by the buyer to the seller is not an essential element of revocation. All that is required by the Code is a notification of revocation. The Code declares that notification is not effective until notice is given and by necessary implication states that there is a sufficient revocation of acceptance when a “notice” is given even though the buyer still has possession of the goods and even though he does not make any tender of the goods to the seller. The concept of revocation of acceptance is not to be confused with rescission.... Anderson, Uniform Commercial Code, § 2–608.18 (2d ed.1971)[.]

Snow v. C.I.T. Corp. of the South, 278 Ark. 554, 647 S.W.2d 465, 467 (Ark.Ct.App.1983). See also, e.g., Mobile Homes Sales Mgmt. v. Brown, 115 Ariz. 11, 562 P.2d 1378, 1381 (Ariz.Ct.App.1977) (any previous “tender back requirement has now been eliminated by the adoption of the UCC”); Art Hill v. Heckler, 457 N.E.2d 242, 245 (Ind.Ct.App.1983) (buyer may revoke acceptance of goods without physically returning them to seller).

In this case, Mauk seeks damages for Pioneer's failure to accept her attempted revocation under OCGA § 11–2–608 of her automobile purchase. Because the UCC does not require that a buyer tender nonconforming goods to effect the revocation of a sales contract, that portion of Scott holding otherwise is hereby overruled.

2. The trial court noted in its order on summary judgment that, absent the controlling precedent of Scott, it would have concluded that questions of fact remain for the

trier of fact regarding whether Mauk's revocation was timely and whether the alleged defects substantially impaired the car's value to her. Pioneer and SunTrust argue that, regardless of whether Scott's attempted revocation was proper, evidence the car had more than 12,000 miles on it when tendered and was driven more than 4,000 miles after the tender constitutes reacceptance as a matter of law. We agree with the trial court that whether Mauk's revocation was timely, whether she reaccepted the car, and whether the alleged defects substantially impaired the car's value to her were questions of fact for the jury to decide.

A buyer who purports to revoke acceptance of goods may be found to have reaccepted them if, after such revocation, the buyer performs acts inconsistent with the seller's ownership of the goods. Griffith v. Stovall Tire & Marine, 174 Ga.App. 137, 138(1), 329 S.E.2d 234 (1985) (evidence buyer refused to allow seller access to repair vehicle with 120,000 miles, absent responsive evidence from buyer, was sufficient for summary judgment). See also Small v. Savannah Intl. Motors, 275 Ga.App. 12, 13–14(1), 619 S.E.2d 738 (2005) (summary judgment properly granted to seller because evidence showed buyer did not seek revocation until she was unable to trade in car that she discovered had been flooded, and buyer's husband liked the car and continued to drive it); Olson v. Ford Motor Co., 258 Ga.App. 848, 850(1), 575 S.E.2d 743 (2002) (summary judgment properly granted to seller on buyer's revocation claim, because evidence showed buyer used vehicle ownership to negotiate with credit union and took other actions consistent with reacceptance); Fiat, 185 Ga.App. at 115(3), 363 S.E.2d 312 (directed verdict properly granted to seller on buyer's revocation claim upon evidence buyer drove car more than 6,000 miles after repairing it and painting it another color).

Here, Pioneer and SunTrust argue that Mauk reaccepted the car because she continued...

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