Oldham's Farm Sausage Co. v. Salco, Inc.
| Citation | 633 S.W.2d 177 |
| Decision Date | 30 March 1982 |
| Docket Number | No. 31822,31822 |
| Parties | OLDHAM'S FARM SAUSAGE CO., Respondent, v. SALCO, INC., Appellant. |
| Court | Court of Appeal of Missouri (US) |
Laurence R. Tucker, W. Robert King, Kansas City, for appellant.
William E. Simmons, Kansas City, for respondent.
Before SOMERVILLE, C. J., Presiding, and TURNAGE and LOWENSTEIN, JJ.
Plaintiff Oldham's Farm Sausage Co. brought suit to recover damages for breach of contract, breach of express and implied warranty, and strict liability regarding a defective "Salco Multi-Chiller" refrigeration system manufactured by defendant Salco, Inc. The trial court, sitting without a jury, found for plaintiff and defendant appeals.
On appeal, defendant asserts that the trial court erred for the following reasons: (1) the judgment failed to require plaintiff to elect its remedy among mutually inconsistent theories; (2) there was not a finding that the multi-chiller was "unreasonably" dangerous under § 402A Restatement (Second) of Torts; (3) the damages suffered were not recoverable under § 402A; (4) the express and implied warranties were effectively disclaimed in the contract; (5) the parties waived any breach of contract action by entering into a second agreement; (6) the recoverable damages were limited by the contract to repair or replacement of parts for one year and no consequential damages; and (7) the award of $214,167.45 exceeded the $200,000 plus interest and costs requested in the prayer.
The following facts may be adduced from the parties Stipulation and the trial court's Findings of Fact. Plaintiff is a Missouri corporation engaged in the business of butchering, processing, packing, selling and distributing pork sausage products. Defendant is a Missouri corporation engaged in the business of manufacturing, selling, supplying and installing machinery and equipment for meat, pork, beef and poultry processing businesses. Defendant held a patent for its "Salco Multi-Chiller" and was apparently the only company in the United States which sold such a machine at the time of its sale to plaintiff.
In February, 1974, defendant submitted to plaintiff a 28 page "Proposal-Quotation-Order Confirmation" for the sale and installation of a "Salco Multi-Chiller" for the expressed purpose of providing a quick chilling for plaintiff's sausage products. The new machine was intended to reduce the time needed to refrigerate plaintiff's perishable product from about 24 hours to approximately 30 minutes, thus drastically reducing the possible bacteria life in the sausage and consequently increasing its "shelf-life."
The "Proposal" represented the machine to be fully automated with a chilling system "complete from loading to discharge." This proposed contract also contained a "Guarantee" directly above the space for signatures which stated that: "The equipment and operation which is listed and set forth in this Order Confirmation is guaranteed to perform as specified, with the final determination by the satisfaction of you, our customer-." The proposal also warranted that the multi-chiller would provide a rapid, thorough, quick chilling of plaintiff's products; that the design, construction and installation of the multi-chiller would be done in a workmanlike manner; and further detailed certain technical specifications as to the machine's performance once installed. The proposed sale price was $150,000.00, 90% paid on delivery and 10% "upon satisfactory operation of the equipment."
On March 2, 1974, plaintiff and defendant signed the contract and plaintiff paid the agreed upon $135,000.00. Plaintiff's president, Mr. Michael Gibson, testified that he read the entire agreement before signing it. However, on the back side of that same signature page was a half-page, 13 paragraph, very fine print section which contained self-entitled "terms and conditions cover(ing) apparatus manufactured by SALCO, INC." (Attached for reference as Appendix 1). Among the various paragraphs concerning "Wiring" and "Voltage, etc." was a "Standard Guarantee and Warranty" which stated in pertinent part that:
The Company will repair or replace, at its option, defects in material or workmanship developing within one year from date of shipment from the factory.
Another paragraph of these "terms" entitled "Limitation of Liability" stated that:
Except for the express warranty above set forth, the Company makes no warranty, express or implied, and makes no warranty of fitness for a particular use .... Under no circumstances shall the Company be liable for damage to good will, loss of profits or for any type of consequential damage.
Plaintiff was required to build a special room to house the multi-chiller and the machine became the sole method for the chilling of plaintiff's products. The multi-chiller was designed to carry plaintiff's sausage products (packaged in polyethylene) into the machine via carriers, the carriers moving through the machine powered by a conveyor belt. The sausage products would then be dumped into a propylene glycol chilling solution, which would freeze the products. The machine was designed to then wash and blow the glycol off the packages, completing the chilling process.
Soon after the machine was installed it failed to operate properly. The carriers often tilted and dumped the sausage products, breaking the packages and soaking the products in glycol, ruining the sausage and damaging the carriers and other parts of the machine. The automatic loading system never did work properly, which necessitated anywhere from one to five of plaintiff's employees to assist the loading and operation of the machine. Further, large amounts of the expensive glycol were lost, requiring the use of much greater amounts of the chilling solution than expected.
In November, 1974, the above problems and many others caused the multi-chiller, and consequently plaintiff's entire business, to be shut down for 7-10 days while major modifications were made by defendant. A checklist of the many problems was prepared by the parties and defendant then attempted to make these repairs. However, the problems continued to exist even after these changes, and neither party was satisfied with the operation of the machine.
In September, 1975, plaintiff's plant was again shut down for 9 days for further repairs and modifications. These repairs were made by two of defendant's former employees (apparently because defendant could not be reached). Although plaintiff's president testified the multi-chiller improved 100% from where it had been, the machine continued to constantly malfunction. The volume of products the machine could handle was lessened; glycol was still escaping the machine; one full-time employee was still needed to operate and assist the machine; the products were still being discharged from the machine with excessive amounts of glycol on them; the glycol was not being properly washed and blown off at the exit conveyor; and the conveyor belt was being cut in half by the conveyor chain. It is agreed by the parties that the machine cannot be further modified to be fully automatic and has since required one or more employees to operate.
The trial court concluded that: (1) defendant had breached the contract; (2) the express warranties mentioned earlier had all been breached; (3) the implied warranties of merchantability and fitness for its intended purpose were breached; and (4) the multi-chiller was "defective" and "dangerous." The court also found that plaintiff was unable to rescind its contract, that no alternative method of freezing its product was reasonably available, and that plaintiff had not failed to mitigate its damages. The parties stipulated to the specific amounts of damages in the event the court found defendant liable. The court detailed the many costs and damages incurred by plaintiff, totalling to $214,167.45.
In this court tried case, this court must affirm unless the judgment below is not supported by substantial evidence, unless it is against the weight of the evidence or unless it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). Moreover, the judgment must be affirmed if it is sustainable on any theory set forth in the pleadings or supported by the evidence. May Department Stores Co. v. County of St. Louis, 607 S.W.2d 857, 869 (Mo.App.1980). In the instant case, the evidence supports the trial court's conclusions regarding the express warranties and the implied warranty of merchantability. The judgment is therefore affirmed.
Defendant contends the trial court erred in not requiring plaintiff to elect its remedy between the allegedly inconsistent theories of contract and tort. Defendant asserts that there is no authority for submitting a contract action in the same suit with a tort action, and states that there is a "long-established standard of making a plaintiff adopt one or the other in bringing a suit." Defendant cites no authority for those contentions and is mistaken in its belief that such is the rule.
Rule 55.10 states that "a party may also state as many separate claims or defenses as he has regardless of consistency and whether based on legal or equitable grounds." See also Rule 55.06(a). The equitable rule of election of remedies is only applicable when the theories of recovery submitted are inconsistent with each other. Timmons v. Bender, 601 S.W.2d 688, 690 (Mo.App.1980); Austin & Bass Builders, Inc. v. Lewis, 350 S.W.2d 133, 140 (Mo.App.1961). In the present case, the combination of express and implied warranty actions can not be said to be inconsistent theories of recovery. See, e.g. O'Brien v. Wade, 540 S.W.2d 603 (Mo.App.1976). Further, although our courts have attempted to restrict the resort to § 402A in areas usually reserved for contract, the damages...
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