Murray v. Holiday Rambler, Inc.
| Decision Date | 02 May 1978 |
| Docket Number | No. 75-565,75-565 |
| Citation | 265 N.W.2d 513,83 Wis.2d 406 |
| Parties | , 24 UCC Rep.Serv. 52 John MURRAY and Alice Murray, Respondents, v. HOLIDAY RAMBLER, INC., Appellant, KOA Trailer Sales, Inc., Defendant. |
| Court | Wisconsin Supreme Court |
This is an appeal from a judgment entered on a verdict in favor of John Murray and Alice Murray, his wife, plaintiffs-respondents, in their action to revoke acceptance of a motorhome which they purchased from KOA Trailer Sales, Inc., defendant, and which was manufactured by Holiday Rambler, Inc., defendant-appellant.
Frank E. Betz, John A. Kaiser and Betz, LeBarron & Poquette, Eau Claire, and Ronald J. Carey, Menomonie, on brief, for appellant.
Phillip M. Steans and Solberg & Steans, Menomonie, on brief, for respondents.
Robert F. Muza, Paul Van Berkel and Muza & Muza, Menomonie, on brief, for defendant.
On January 23, 1974, the plaintiffs purchased a 22-foot 1973 Avenger motorhome for a total sales price, including sales tax, license fees and trade-in allowance on another motorhome owned by the plaintiffs, of $11,007.15.
Before taking delivery of the motorhome on January 30, 1974, Mr. Murray signed a "PRE-DELIVERY INSPECTION & ACCEPTANCE DECLARATION," acknowledging that he had inspected or had been given a demonstration of various components of the motorhome, and that these items had performed or had been explained to his satisfaction. Mr. Murray testified that he had gone through the items on this check list and had accepted the motorhome. He further testified that he had read "some" of the document and received a copy of it. The "PRE-DELIVERY INSPECTION & ACCEPTANCE DECLARATION" contained the warranty which is the basis for this litigation.
The plaintiffs had problems with the motorhome from the day they took possession. It was returned repeatedly to KOA Trailer Sales, Inc., (hereinafter KOA) as an authorized dealer for the manufacturer, Holiday Rambler, Inc., (hereinafter Holiday Rambler), and various repairs and adjustments were performed at the expense of Holiday Rambler. Mr. Murray estimated that by July, 1974, the motorhome had been returned to KOA nine or ten times.
In July, 1974, the plaintiffs traveled to Colorado in the motorhome. On the trip they experienced difficulty with the operation of it in a number of respects. We describe the various problems with the vehicle in greater detail in discussing the issue of whether the limited warranty remedy had failed its essential purpose.
On returning to Wisconsin in mid-July, the Murrays took the motorhome to KOA, and were assured that it would be repaired, either by KOA or by Holiday Rambler, apparently without expense to the Murrays. There was testimony that the Murrays agreed to this.
Arrangements were then made to have the vehicle taken to the Holiday Rambler factory in Wakarusa, Indiana, for any necessary adjustments. Holiday Rambler informed the Murrays, however, that they would be required to pick up the vehicle at the Indiana factory themselves.
Mr. Murray decided not to have the repairs made. Instead, he picked up the motorhome at KOA, drove it home and hired a lawyer. By letter dated August 15, 1974, the Murrays informed KOA that they were revoking acceptance of the motorhome and that they demanded payment of $11,900. In September, 1974, KOA apparently offered to reimburse the Murrays for the expense of traveling to the Holiday Rambler factory, but the Murrays rejected this offer, and this action was commenced.
The after-verdict motions of defendant, KOA, to change the jury's answers to certain questions and for judgment notwithstanding the verdict were denied, and judgment was entered in accordance with the verdict. 1
Holiday Rambler has appealed, and the plaintiffs have filed a notice of review with regard to the trial court's exclusion of evidence of plaintiffs' litigation expenses. KOA has been admitted as a party pursuant to sec. 817.12(6), Stats.
The issues presented are as follows:
1. Does Holiday Rambler's limited warranty, together with its disclaimer of all other warranties, preclude revocation of acceptance of the motorhome?
2. Were the plaintiffs entitled to revoke acceptance of the motorhome?
3. Were the plaintiffs entitled to recover damages for loss of use of the motorhome?
4. Did the trial court err in excluding evidence of plaintiffs' litigation expenses?
5. Did the trial court err in instructing the jury with regard to prejudgment interest?
LIMITED WARRANTY AND WARRANTY DISCLAIMER.
Holiday Rambler and KOA contend on this appeal that the limited express warranty given by Holiday Rambler prevents the plaintiffs from revoking acceptance of the motorhome.
Under the Uniform Commercial Code, (hereinafter UCC) a seller of goods may limit his contractual liability in two ways. He may disclaim or limit his warranties, pursuant to sec. 402.316, Stats., or he may limit the buyer's remedies for a breach of warranty, pursuant to sec. 402.719. These methods are closely related, and in many cases their effect may be substantially identical. K-Lines, Inc. v. Roberts Motor Co., 273 Or. 242, 541 P.2d 1378 (1975); White and Summers, Handbook of the Law Under the Uniform Commercial Code (hornbook series, 1972) (hereinafter White and Summers), sec. 12-8, p. 375. Conceptually, however, they are distinct. A disclaimer of warranties limits the seller's liability by reducing the number of circumstances in which the seller will be in breach of the contract; it precludes the existence of a cause of action. A limitation of remedies, on the other hand, restricts the remedies available to the buyer once a breach is established. White and Summers, supra, sec. 12-11, pp. 383, 384.
In the present case we believe the "PRE-DELIVERY INSPECTION & ACCEPTANCE DECLARATION" is an attempt to both disclaim warranties and limit the remedies available to the buyer upon breach.
Sec. 402.316, Stats. 2 permits a seller to limit or exclude both implied and express warranties. See: Recreatives, Inc. v. Myers, 67 Wis.2d 255, 264, 265, 226 N.W.2d 474 (1975). Language limiting implied warranties must be conspicuous and otherwise consistent with the provisions of sec. 402.316 and must not be unconscionable in light of the circumstances at the time the contract was made. Sec. 402.302.
The document signed by Mr. Murray purported to exclude all warranties, express or implied, and stated in part, above his signature:
"The undersigned parties attest to the fact that the above representations are, to the best of their knowledge, true and that the purchaser has received a copy of this Pre-Delivery Inspection and Acceptance Declaration and read thoroughly the MANUFACTURER'S UNDERTAKING AVENGER CORPORATION on the reverse side."
The reverse side of this document stated:
The language used in the document constitutes a warranty ". . . that the product . . . was free of defects in material and workmanship at the time of its delivery . . ." 4 Because this express warranty conflicts with the preceding disclaimer of all warranties, the language of express warranty must control. White and Summers, supra, at sec. 12-3, p. 352.
Official Comment 1 to sec. 2-316, UCC (sec. 402.316, Stats., supra ) states that that section:
The undertaking in the instant case therefore constitutes a warranty that the motorhome was free of defects at the time of delivery, subject to whatever limitation is effected by the limitation of remedies language contained therein. 5
The damages which would otherwise be available upon a breach of contract may be altered or limited by the parties pursuant to sec. 402.719, Stats. 6 This section gives the parties substantial latitude to fashion their own remedies for breach of the contract. However, the UCC disfavors limitations on remedies and provides for their...
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