Ricwil, Inc. v. S.L. Pappas and Co., Inc.

• Decision Date: 29 May 1992
• Citation: 599 So.2d 1126
• Parties: 18 UCC Rep.Serv.2d 88 RICWIL, INC. v. S.L. PAPPAS AND COMPANY, INC., and Dowdy & Associates, Inc. DOWDY & ASSOCIATES, INC. v. S.L. PAPPAS AND COMPANY, INC. 1901744, 1901809.
• Court: Alabama Supreme Court

Page 1126

599 So.2d 1126

18 UCC Rep.Serv.2d 88

RICWIL, INC. v. S.L. PAPPAS AND COMPANY, INC., and Dowdy & Associates, Inc.

DOWDY & ASSOCIATES, INC. v. S.L. PAPPAS AND COMPANY, INC.

1901744, 1901809.

Supreme Court of Alabama.

May 29, 1992.

James H. Starnes of Starnes & Atchison, Birmingham, for appellant Ricwil, Inc. John D. Herndon of Huie, Fernambucq & Stewart, Birmingham, for appellee/cross-appellant Dowdy & Associates, Inc.

George C. Lucas and Larry K. Anderson, Birmingham, for appellee S.L. Pappas & Co., Inc.

MADDOX, Justice.

This case concerns alleged breaches of contract, express warranty, and implied warranty of fitness for a particular purpose. The issues presented are whether the trial court erred in: (1) failing to direct a verdict for the defendants, Ricwil, Inc., and Dowdy & Associates, Inc. ("Dowdy"), (2) failing to enter a JNOV for Ricwil and Dowdy, and (3) failing to give a requested jury instruction relating to nominal damages or to grant a motion for remittitur.

In May 1982, Management Builders, Inc., subcontracted with Air Constructors, Inc., for Air Constructors to install a boiler room and underground piping system on a National Guard armory project at Fort McClellan, Alabama. After receiving specifications from Management Builders, Air Constructors contacted Dowdy, a piping supplies retailer and sales representative for Ricwil, to order pipe that would meet contract specifications. Dowdy submitted a formal submittal or bid that recommended to Air Constructors that it use Ricwil's "Copper-Gard" system for the project. Along with the formal proposal, Dowdy sent Air Constructors a product brochure and an installation manual. Ricwil's Copper-Gard system consisted of lengths of copper pipe, pre-insulated with a special foam covering and special "O-ring" couplings for connecting the lengths of pipe. Relying on Dowdy's expertise as a pipe supplies retailer, and on the project engineer's approval, Air Constructors ordered a large quantity of the Copper-Gard pipe and sufficient Copper-Gard "O-ring" couplings for the project. The contract specifications called for pipe that would withstand a water temperature of up to 250 degrees Fahrenheit. The product brochure contained statements to the effect that the Copper-Gard pipe would withstand such a temperature.

After the entire piping system was put together, Air Constructors tested the pipe for leaks, using cold water. No major leaks occurred, so Air Constructors covered the trenches containing the piping system. In October 1983, the boiler portion of the system was completed, and hot water was placed into the piping system. Leaks occurred almost immediately. Air Constructors returned to the work site, excavated numerous visible leak areas, and repaired the pipe. At all excavated areas, separated "O-ring" couplings were found. After making several repairs to the system, Air Constructors notified Ricwil and Dowdy of the problems it was experiencing, and representatives from both companies visited the work site.

Air Constructors sued Dowdy and Ricwil, seeking compensation for the cost of the repairs made to the system. Air Constructors alleged breach of contract, breach of an implied warranty of fitness for a particular purpose, and breach of an express warranty. After the case was filed, Air Constructors merged with S.L. Pappas and Company, Inc. ("Pappas"), and Pappas was substituted as the proper party plaintiff. Dowdy cross-claimed against Ricwil, seeking indemnity for any liability found against it. After evidence was presented, both Ricwil and Dowdy filed motions for directed verdicts. The trial court denied these motions, and the case was submitted to the jury. The jury returned a verdict for Pappas, awarding $22,500.81 in damages, and the trial court entered a judgment based on that verdict. The trial court also entered a judgment for Dowdy on its cross-claim. Both Dowdy and Ricwil filed post-judgment motions for JNOV, or in the alternative, for new trial, or in the alternative, for remittitur. The trial court denied these motions.

Ricwil and Dowdy both contest the trial court's denial of their motions for directed verdict and for JNOV, or new trial, or remittitur. Both Ricwil and Dowdy argue, in essence, that the legal theories used by Pappas are inapplicable to the facts of this case and that the trial court erred in submitting the case to the jury. We deem these arguments to be challenges to the trial court's legal conclusions, and, in certain instances, to the sufficiency of Pappas's evidence to support the given legal theory.

Initially, we note that our standard of review is different as to each of these types of challenges. For a sufficiency-of-the-evidence challenge, the ultimate question is whether the nonmovant has presented sufficient evidence to allow submission of the issue to the jury for a factual resolution. See, Rule 50(a), Ala.R.Civ.P.; Alabama Power Co. v. Williams, 570 So.2d 589 (Ala.1990); John R. Crowley & Bros., Inc. v. Brown, 569 So.2d 375, 376 (Ala.1990); J. Hoffman & S. Guin, Alabama Civil Procedure § 8.37 (1990). Because this case was pending on June 11, 1987, the applicable sufficiency standard is the "scintilla evidence rule." See, § 12-21-12(e), Ala.Code 1975; and Melton v. Perry County Bd. of Educ., 562 So.2d 1341 (Ala.Civ.App.1990). The "scintilla evidence rule" requires submission of an issue to the jury if there is any evidence supporting the inference the nonmovant wishes the jury to draw; or, stated differently, if there is so much as "a mere gleam, glimmer, spark, the least particle or the smallest trace of evidence" supporting that inference, then the issue must be submitted to the jury. Allstate Enterprises, Inc. v. Alexander, 484 So.2d 375, 376-7 (Ala.1985); and see, C. Gamble, McElroy's Alabama Evidence § 448.01 at 987 (4th ed. 1991). Also, this Court must view all the evidence in a light most favorable to the nonmovant and must entertain such reasonable inferences as the jury would be free to draw from the evidence. Williams v. Allstate Ins. Co., 591 So.2d 38 (Ala.1991).

For a strictly legal challenge, however, no presumption of correctness or favorable initial view applies. H.C. Schmieding Produce Co. v. Cagle, 529 So.2d 243, 247 (Ala.1988). Rather, "we [must] review any rulings purely on matters of law without any presumption of correctness on the part of the trial court." Id.

The Breach of Contract Claim

Pappas contended at trial that Ricwil and Dowdy breached their contractual obligation to it by delivering goods that did not meet the project's specifications. Specifically, Pappas argued that the Copper-Gard system could not withstand a water temperature of up to 250 degrees Fahrenheit. Neither Pappas nor Ricwil addresses the breach of contract issue on appeal, so we deem it waived as to them. Dowdy, however, argues that there was no contract between it and Pappas because, it says, there was no consideration flowing from Pappas to it.

Dowdy cites Shirley v. Lin, 548 So.2d 1329, 1332 (Ala.1989), for the proposition that all contracts require five elements, all of which must exist for a contract to be enforceable. These elements are: (1) an agreement, (2) consideration, (3) two or more contracting parties, (4) a legal object, and (5) capacity. Id. We find nothing in the law of sales that would change the necessity for the above elements. See, §§ 7-1-103 and 7-2-103(4), Ala.Code, 1975. We do find, however, at least a scintilla of evidence of each element of a contract listed above, including the element of consideration.

On direct examination, Sonny Marshton, a representative of Pappas, was asked, "Did you purchase the piping from Dowdy & Associates since they were the low bidder?" He replied, "Yes, sir." This would amount to at least a scintilla of evidence of consideration flowing to Dowdy.

Additionally, Dowdy argues that the trial court erred in submitting Pappas's breach of contract theory against it to the jury because, it says, Dowdy was, at most, an agent of Ricwil, and, it says, the law is clear that "The general rule in Alabama concerning liability of an agent for the breach of contract entered on behalf of a disclosed principal is that the agent binds either the principal or himself to the contract, but not both." Quoting Shirley, 548 So.2d at 1333. (Emphasis supplied; citations omitted.) We find, however, that there was sufficient conflict in the evidence relative to the issue of agency to make this a factual issue for the jury. Dowdy stresses that the documentation and transfer of money in this case was between Pappas and Ricwil, with Dowdy merely acting as a sales representative for Ricwil. The evidence is clear, however, that Pappas dealt directly with Dowdy in asking for the product submittal, and that any reliance by Pappas was on Dowdy's expertise and not on Ricwil's. Given this conflict, the trial court did not err in submitting the breach of contract count to the jury.

The Implied Warranty of Fitness Claim

Pappas contended at trial that the same course of conduct by Ricwil and Dowdy that allegedly breached their contract with Pappas also breached an implied warranty of fitness for a particular purpose. That is, Pappas contended that Ricwil and Dowdy knew or had reason to know that Pappas intended to use the Copper-Gard system pipe to supply heated water to various buildings at the Fort McClellan project.

Pappas has failed to address the issue of an implied warranty of fitness for a particular purpose. Ricwil, however, argues that it excluded any warranty of fitness for a particular purpose and that it did so in conspicuous, written terms. We are convinced that Ricwil failed to comply with the requirements of § 7-2-316(2), and, thus, failed to exclude the warranty of fitness for a particular purpose.

On the face sheet of the Copper-Gard installation manual, admittedly received and read by Sonny Marshton, a representative of Pappas, was the following exclusion...