Potts v. Offutt

• Decision Date: 15 August 1985
• Docket Number: No. 3-185A2,3-185A2
• Parties: 41 UCC Rep.Serv. 815 Leroy J. POTTS, d/b/a Town and Country Mobile Homes, Defendant-Appellant, v. Ray OFFUTT and Janet Offutt, Plaintiffs-Appellees.
• Court: Indiana Appellate Court

Page 429

481 N.E.2d 429

41 UCC Rep.Serv. 815

Leroy J. POTTS, d/b/a Town and Country Mobile Homes Defendant-Appellant, v. Ray OFFUTT and Janet Offutt, Plaintiffs-Appellees.

No. 3-185A2.

Court of Appeals of Indiana,

Third District.

Aug. 15, 1985.

James R. Byron, Thorne, Grodnik & Ransel, Elkhart, for defendant-appellant.

John O. Worth, Clarkson & Worth, Rushville, for plaintiffs-appellees.

HOFFMAN, Judge.

Defendant-appellant Leroy Potts d/b/a Town & Country Mobile Homes (Potts) appeals an adverse judgment rendered against him in favor of plaintiffs-appellees Ray and Janet Offutt (Offutts). The Offutts, as purchasers, brought suit against Potts for breach of a contract for the sale of a new mobile home. The trial court awarded the Offutts damages for the difference between the contract price and the amount which they ultimately paid for the same mobile home from another dealer, D & J Mobile Homes.

The evidence most favorable to the trial court's decision reveals that the Offutts attended a mobile home showing in South Bend, Indiana at which Potts, a mobile home dealer, displayed several homes. The Offutts determined that they were interested in one particular home Potts was selling. Potts' salesman, Roland Hintz, ¹ discussed the purchase of the home with the Offutts. Potts participated in or was present during portions of the discussion.

A price of $23,000.00 was quoted to the Offutts, who requested a $12,000.00 trade-in allowance for their mobile home as a partial down payment. Hintz completed portions of a form contract designated as a "Purchase Agreement." The $23,000.00 total price along with the $12,000.00 trade-in allowance were listed on the document. The document reflected a balance due of $11,000.00. The Offutts asked Hintz to sign the document, whereupon they also signed.

The Offutts tendered a $500.00 down payment; however, Hintz stated that a much smaller down payment would suffice. A $20.00 deposit was agreed upon.

According to the Offutts, a tentative delivery date of the following Wednesday was established, and they were told to make preparations for their new mobile home. The Offutts curtailed a trip to Michigan and returned to their home in Connersville, Indiana to prepare the site. In addition to moving into a motor home, the Offutts incurred a $200.00 rental expense to store their furniture.

When the mobile home was not delivered as planned, the Offutts telephoned several times to inquire as to its whereabouts. Although unsure who they spoke to each time, Mr. Offutt testified that on one occasion he spoke to someone who identified himself as the owner of Town & Country Mobile Homes. The Offutts testified that they were given various reasons for the failure of delivery.

Potts testified that he could not allow the $12,000.00 trade-in value for the Offutts' mobile home based upon an appraisal of the home by an employee who viewed it from the outside only. Potts then had the exact mobile home the Offutts had chosen delivered to D & J Mobile Homes in Richmond, Indiana, from whom the Offutts purchased it for approximately $28,000.00. The purchase agreement with D & J specifically noted that certain items, which had been in the mobile home originally, were included in the price. The Offutts were given a $12,000.00 trade-in allowance for their mobile home by D & J.

The Offutts then brought this suit to recover the additional cost of the mobile home and for consequential damages incurred. On appeal Potts raises three issues for review. As restated, those issues are:

(1) whether Potts had a right to inspect and reject the mobile home offered as a trade-in, after the purchase agreement was signed indicating a $12,000.00 trade-in allowance for the home;

(2) whether the trial court abused its discretion in not allowing an amendment to a pre-trial order, wherein Potts stipulated that the contract was signed by Roland Hintz on behalf of Potts; and

(3) whether the trial court properly assessed the damages awarded to the Offutts.

The trial court in the instant case made no specific findings of fact or conclusions of law. On appeal, this Court will presume general judgments to be based upon findings which are supported by the evidence, and must affirm if the decision of the trial court can be sustained on any legal ground. General Plating & Engineering, Inc. v. Syn Indus. (1985), Ind.App., 472 N.E.2d 1290.

At trial, the purchase agreement signed by Hintz and the Offutts was introduced into evidence. One provision in the agreement states,

"If the used trailer or mobilehome is not delivered to the dealer at the time of original appraisal, and if later, on its delivery, it appears to the dealer there have been material changes made in the furnishings or accessories thereof, or in its general physical condition, the dealer shall then have the right to make a reappraisal. This later appraisal value will then determine the allowance to be made for such used trailer, mobilehome or other vehicle."

Potts argues that the above language is unambiguous and when coupled with the notation on the face of the agreement that the $20.00 paid by the Offutts was a "hold deposit," demonstrates that Potts was free to make an original appraisal and reject the trade-in, even after the agreement was signed. Further, Potts maintains that he was actually "purchasing" the Offutts' old home and that he is entitled to a buyer's rights of inspection and rejection as provided in IND.CODE Secs. 26-1-2-513 and 26-1-2-601.

The terms of a contract are ambiguous if reasonable minds could honestly differ as to their meaning. Indiana-Kentucky Elec. Corp. v. Green (1985), Ind.App., 476 N.E.2d 141. Normally a contract is construed most strongly against the drafting party. Wabash Ford Truck Sales v. Ford Motor Co. (1984), Ind.App., 472 N.E.2d 611. The language relied upon by Potts is susceptible of several interpretations. At best, the language appears to allow a modification of the contract price under certain circumstances; namely, damage or alteration to the trade-in subsequent to the original appraisal. The trial court's implicit finding that once the trade-in amount was listed on the form and the agreement was signed, the only right to inspect the mobile home would be the reappraisal for material changes to the home, must be sustained. Thus, any opportunity to alter the $12,000.00 appraisal amount absent some change in the home's condition, was foreclosed once the trade-in amount was agreed upon and entered on the form.

Testimony by Hintz that to the best of his knowledge Potts approved the $12,000.00 trade-in allowance bolsters a finding that Potts was bound by the agreement and had no right to later make an original appraisal of the mobile home.

Potts advances an alternative argument that he should be considered the purchaser of the trade-in mobile home, and should acquire a buyer's rights to inspect and reject non-conforming goods as found in IND.CODE Secs. 26-1-2-513 and 26-1-2-601 respectively. In Home Indemnity Co. v. Twin City Fire Insurance Co. (7th Cir.1973), 474 F.2d 1081, the Court stated that with regard to a sales transaction involving a trade-in,

"[e]ach party to the transaction is the 'seller' of the goods it is to deliver. U.C.C. Sec. 2-304(1), Ind.Code Sec. 26-1-2-304(1) (1971), provides: 'The price can be made payable in money or otherwise. If it is payable in whole or in part in goods each party is a seller of the goods which he is to transfer.' " (Emphasis in original.)

474 F.2d at 1084.

Although not addressed by the Court in Home Indemnity, supra, the logical implication of the statute is that the recipient of the trade-in mobile home is a buyer, and may be entitled to buyer's rights as provided by statute. If Potts acquired such rights, the record shows that he did not comply with the statute governing the procedure for properly rejecting goods.

IND.CODE Sec. 26-1-2-602(1) states that "[r]ejection of goods must be within a reasonable time after their delivery or tender. It is ineffective unless the buyer seasonably notifies the seller." This Court has determined that an effective rejection requires timeliness and reasonable notification communicated by the buyer to the seller. Hahn v. Ford Motor Co., Inc. (1982), Ind.App., 434 N.E.2d 943.

Assuming that vacating the trade-in mobile home and readying the site for the new mobile home constituted tender of the trade-in, Potts neither timely rejected, nor reasonably notified the Offutts of the rejection. There exists no evidence in the record that Potts ever explained to the Offutts that he was rejecting the trade-in home. Relative to the course of events which occurred after the mobile home show, Mr. Offutt testified as follows:

"Q After these conversations did you ever meet with Town and Country personally?

A No.

Q Did they ever deliver that mobile home to you?

A No.

Q How long did you wait?

A It was approximately three weeks or over. The last time that I called they said Connersville was too far away.

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Q The last time you talked to Town and Country, you called them. Is that correct?

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