Redfern Meats, Inc. v. Hertz Corp., 50105

Decision Date12 March 1975
Docket NumberNo. 50105,No. 1,50105,1
Citation134 Ga.App. 381,215 S.E.2d 10
Parties, 17 UCC Rep.Serv. 82 REDFERN MEATS, INC. v. HERTZ CORPORATION et al
CourtGeorgia Court of Appeals

McClain, Mellen, Bowling & Hickman, William M. Poole, Atlanta, for appellant.

Dennis & Fain, Dennis J. Webb, Martin D. Chitwood, Atlanta, for appellees.

Syllabus Opinion by the Court

MARSHALL, Judge.

The question involved in this appeal is whether or not the implied warranty provisions of the Uniform Commercial Code apply to the transaction between these parties.

Redfern entered into a 'Truck Lease Service Agreement' with Hertz for the rental of several tractors and refrigerated trailers. One such trailer was put into service by Redfern of June 20, 1973. While transporting frozen meat from Atlanta to North Carolina on June 26, 1973, the refrigeration unit on the trailer failed, causing the spoilage of meat alleged to be worth $7,574.47.

The leasing agreement contained a paragraph entitled 'Non-Liability for Contents.' It provided: 'Hertz shall not be liable for loss of or damage to any property left, stored, loaded or transported in or upon any vehicle furnished by Hertz to Customer pursuant to this Agreement, whether or not due to the negligence of Hertz, its agents or employees, and Customer hereby agrees to hold Hertz, its agents and employees, harmless from and to defend and indemnify them from and against all claims based upon or arising out of such loss or damage.' This paragraph was listed among thirty-one other paragraphs and not distinguished from them by lettering, type size or otherwise.

Redfern brought suit against Hertz in two counts, alleging in Count 1 that the damage was caused by Hertz's breach of implied warranty of merchantability and implied warranty of fitness for a particular purpose. In Count 2 it alleged Hertz breached its bailor's warranty under Code § 12-204 ('The obligations of the bailor of things are . . . to warrant the right of possession, and that the thing bailed is free from any secret fault rendering it unfitted for the purposes for which it is hired.') Redfern attached a copy of the Agreement to its complaint as well as copies of advertising material used by Hertz in promoting its leasing service. Hertz answered, inter alia, denying liability for the damage and asserting that the 'non-liability' clause, supra, exonerated it from loss of contents of the trailer. Redfern moved for summary judgment as to liability, attaching affidavits of the driver of the truck, its sales manager, and its president. Hertz moved for judgment on the pleadings on the grounds of the 'non-liability' clause. The trial court denied Redfern's motion for summary judgment and granted Hertz's motion for judgment on the pleadings and dismissed the action. Redfern appeals, enumerating as error, (1) the denial of its motion, and (2) the granting of Hertz's motion. Held:

1. Redfern contends that its motion for summary judgment should have been granted because there remain no issues of material fact and the facts show Hertz breached the implied warranties of the Uniform Commercial Code. However, the denial of Redfern's motion for summary judgment was not certified for direct appeal and is only enumerated as error. See Code Ann. § 81A-156(h). Absent a certificate on this denial, we cannot review the factual contentions concerning the nature of the defect, whether the defect existed when Redfern took possession, and whether it caused the damage incurred. Allen v. Alco Finance, Inc., 131 Ga.App. 545(2), 206 S.E.2d 547; Moulder v. Steele, 118 Ga.App. 87, 162 S.E.2d 785.

2. In considering the remaining enumeration of error (the granting of Hertz's motion for judgment on the pleadings), we accept as true all of Redfern's allegations of fact in its pleadings and all reasonable inferences and intendments from those facts. 'The motion for a judgment on the pleadings only has utility when all material allegations of fact are admitted in the pleadings and only questions of law remain.' Wright & Miller, Federal Practice and Procedure § 1367, p. 685 (1969). In effect, Hertz's motion means that even if Redfern's factual allegations are true, Hertz is not liable and is entitled to judgment as a matter of law. We, therefore, do not consider factual matters outside the pleadings. These matters consist of three affidavits submitted by Redfern in support of its motion for summary judgment. Whether or not the trial judge considered these affidavits in granting Hertz's motion for judgment on the pleadings and treated it as a summary judgment under Rule 56, the standard applied in both motions is the same, i.e., taking all facts and inferences against Hertz and in favor of Redfern, is Hertz entitled to judgment as a matter of law. Both motions result in an adjudication of Redfern's claim. And in this case the affidavits contain facts which are not in dispute, are included in Redfern's allegations, or have no bearing on the legal issue involved. Furthermore, it is apparent that the trial judge granted Hertz's motion because Hertz had disclaimed all warranties-a question of law-and not because there was no breach of these warranties.

3. Count 2 of Redfern's complaint seeks recovery from Hertz on the theory that if Hertz is considered a bailor of the refrigerated trailer it breached its warranty imposed by Code § 12-204, supra. It does not appear that this code section has been repealed by the Uniform Commercial Code, Code Ann. §§ 109A-10-103, 109A-10-104, and it would apply in addition to warranties under the UCC. Hertz contends that since the disclaimer provision of the UCC (Code Ann. § 109A-2-316) does not apply to a Code § 12-204 warranty, its liability under such warranty has been disclaimed under the 'non-liability' clause of the agreement.

We agree. The liability of a lessor may be exculpated by such a clause, even when the damage is caused by the lessor's own negligence, as long as the exculpatory clause is not contrary to public policy and explicitly shows an intent to include the lessor's own negligence, and that negligence does not amount to wilful and wanton misconduct. Robert & Co. v. Pinkerton & Laws, Co., 120 Ga.App. 29, 169 S.E.2d 360; Gough v. Lessley, 119 Ga.App. 275, 166 S.E.2d 893; Hawes v. Central of Georgia R. Co., 117 Ga.App. 771, 162 S.E.2d 14; Batson-Cook Co. v. Georgia Marble Setting Co., 112 Ga.App. 226, 230, 144 S.E.2d 547; Bohannon v. Southern R. Co., 97 Ga.App. 849, 850, 104 S.E.2d 603. The language here is unambiguous and explicit. There being no allegations of wanton or wiful misconduct on the part of Hertz, and no public interest or public policy violated, we find that the liability of Hertz under the warranty provision of Code § 12-204 has been exculpated. See also Mays v. C. & S. Nat. Bank, 132 Ga.App. 602, 608, 208 S.E.2d 614, 618, where an exculpatory clause was said to have 'eliminate(d) any implied warranty of law,' even though it did not mention the word 'warranty.'

However, the exculpatory clause does not eliminate liability of Hertz based on implied warranties under the UCC (Count 1), if the UCC is found applicable to this transaction (see Division 4, infra). Nor do we agree with Hertz's contention that even if the implied warranties of the UCC do apply, its liability based thereon has been indemnified by the second part of the 'non-liability' clause of the agreement. It would be incongruous with the purpose of Code Ann. § 109A-2-316 (the disclaimer of implied warranties section) to permit that which is directly prohibited (an inconspicuous disclaimer will not eliminate warranty liability) to be accomplished indirectly (by indemnification).

We conclude that even if Hertz is considered a bailor of the property, Redfern could not recover on that ground. As to Count 2, the court properly granted Hertz's motion for judgment on the pleadings.

4. In Count 1, Redfern specifically alleges breach of the two implied warranties embodied in Code Ann. § 109A-2-314 and Code Ann. § 109A-2-315. Redfern's right to recover under this count depends upon whether or not the implied warranties of the UCC apply to the transaction. If they do, there is no question that the 'non-liability' clause in the agreement, supra, does not meet the requirements of Code Ann. § 109A-2-316, and does not disclaim these implied warranties.

Under the 'Truck Lease Service Agreement,' Redfern agreed to rent several tractors and trailers from Hertz. For the refrigerated trailer in question, Redfern agreed to pay 'rental for use' of $77.78 per week plus a mileage charge of 2.4cents per mile and a refrigeration charge of 38cents for each running hour per week. Redfern was billed for the total of these charges on a weekly basis.

Redfern was responsible for procuring and maintaining liability insurance, at its sole cost, by an insurer acceptable to Hertz, and the policy was to name Hertz as the insured. In case of accident, Redfern agreed to report to Hertz and to cooperate and to hold Hertz harmless for any liability imposed above the limits of liability. Redfern was not responsible for damage to the vehicles themselves, except when caused by its own agent's carelessness and except for the first $500 on tractors and $100 on trailers damaged by accident or collision.

Redfern was responsible for controlling the conduct of its drivers while operating the equipment. It also agreed to hold Hertz harmless for any fines resulting from violations of any laws while the vehicles were being operated by Redfern.

Hertz was obligated to provide vehicle registration plates, fuel, oil, lubricants and tires and to keep the vehicles in good mechanical condition and running order. Redfern was required to have the vehicles periodically inspected and serviced at the Hertz Atlanta garage.

In the event of a vehicle becoming disabled Hertz assumed complete responsibility for its repair and agreed to furnish Redfern...

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