Schuchmann v. Air Services Heating & Air

• Citation: 199 S.W.3d 228
• Decision Date: 31 August 2006
• Docket Number: No. 27511.,27511.
• Parties: Robert SCHUCHMANN, Plaintiff-Respondent, v. AIR SERVICES HEATING & AIR CONDITIONING, INC., Defendant-Appellant.
• Court: Court of Appeal of Missouri (US)

199 S.W.3d 228

Robert SCHUCHMANN, Plaintiff-Respondent, v. AIR SERVICES HEATING & AIR CONDITIONING, INC., Defendant-Appellant.

No. 27511.

Missouri Court of Appeals, Southern District, Division One.

August 31, 2006.

COPYRIGHT MATERIAL OMITTED

David L. Wieland, David L. Wieland, LLC, Springfield, for appellant.

W. Tom Norrid, Norrid & Robertson, P.C., Springfield, for respondent.

KENNETH W. SHRUM, Judge.

Robert Schuchmann ("Plaintiff") filed a two-count "Petition for Damages" against Air Services Heating & Air Conditioning, Inc. ("Defendant"). Count I sought damages under Chapter 407 of the Revised Statutes of Missouri (2000), otherwise known as the Missouri Merchandising Practices Act ("MMPA"). Count II pled a cause of action for common law fraud. After the case was submitted to the trial court on a set of stipulated facts, the court entered a judgment for Plaintiff in the amount of $6,406.¹

Defendant appeals, alleging three points of trial court error. In Point I, Defendant argues that Plaintiff's cause of action was barred by res judicata principles. Defendant's second point alleges the judgment was against the weight of the evidence because Plaintiff did not prove an MMPA violation. Finally, in Point III, Defendant claims Plaintiff's cause of action "was filed beyond any applicable statute of limitations." We affirm.

STANDARD OF REVIEW

The judgment of the trial court will be sustained unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30, 32[1] (Mo.banc 1976). "Appellate courts should exercise the power to set aside a decree or judgment on the ground that it is `against the weight of the evidence' with caution and with a firm belief that the decree or judgment is wrong." Id. at 32[2]. In our review we must decide if the trial court drew correct legal conclusions from the stipulated facts entered into by the parties. Hadel v. Board of Educ. of Sch. Dist. of Springfield, R-12, 990 S.W.2d 107, 111[2] (Mo.App.1999).

FACTS

The stipulated facts show that Plaintiff bought a "4 ton heating and air conditioning unit" with a "lifetime warranty" from Defendant in May 1998. From that time until December 2000, Defendant repaired the unit on five occasions, thus honoring the warranty. In December, Defendant informed Plaintiff that it was no longer operating in the Joplin area and offered him $300 to cancel the warranty which Plaintiff rejected.

Even though Defendant was not doing business in Plaintiff's general residential vicinity, it continued to honor the warranty until May 2003. After this last service call in May 2003, Defendant again offered Plaintiff money to cancel the warranty ($400). As before, Plaintiff rejected the offer. Thereafter, Defendant refused to honor the warranty.

In July 2003, Plaintiff filed an action against Defendant in "small claims court," alleging Defendant refused to honor the lifetime warranty, refused to fix a problem with the unit ("freon leaking"), and refused to send Plaintiff an "evaporator coil" to fix the freon problem.² The small claims court awarded Plaintiff $3,000 for damages. Defendant then filed an application for trial de novo. Before the de novo trial, Plaintiff tried to amend his petition for damages to include an additional count, namely, an MMPA violation. The court, however, sustained Defendant's motion to strike "as to new cause of action re [MMPA]." After the trial, the court entered a judgment, awarding Plaintiff $1,047 plus costs.³

Later, in December 2004, Plaintiff filed the underlying action involved in this appeal, specifically, his two-count "Petition for Damages" alleging an MMPA violation and common law fraud. Primarily at issue here is Count I, the MMPA suit. The essence of Plaintiff's Count I is that Defendant promised a lifetime warranty to Plaintiff when he purchased the unit, and when it refused to honor this obligation, an MMPA violation occurred, thus causing Plaintiff injury.

After receiving the stipulation of facts and suggestions by both parties, the trial court entered a judgment for Plaintiff in the amount of $6,406. This appeal followed.

Point II: Sufficiency of the Evidence to Support MMPA Violation⁴

Defendant's second point maintains the trial court erred in entering judgment for Plaintiff because there was no evidence to prove a violation of the MMPA. In essence, Defendant alleges that the evidence showed a simple breach of contract, i.e., there was no evidence of any deception, fraud, unfair practice, or the like as required under the MMPA.

The pertinent part of the MMPA statute (§ 407.020.1) provides:

"The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce . . . is declared to be an unlawful practice."⁵ (Emphasis added.)

Defendant argues there is no evidence of deception, or fraud, or false pretense, or false promise, or misrepresentation, or unfair practice at the time the unit was sold; consequently, no MMPA violation was proven. Repeatedly, throughout its brief, Defendant focuses on the fact that there was no evidence of "unfairness" at the time of the sale. Defendant argues that "the actual words of the statute cannot be ignored," singling out the "in connection with the sale" language of section 407.020.1.

Defendant further asseverates that the MMPA "requires some connection between the deception, fraud, false pretense, promise, or misrepresentation, unfair practice and the sale." Defendant continues in its brief:

"True, [Defendant] represented at the time of the sale that in new condition [sic] with a lifetime warranty. But there is no stipulation that, at the time of the sale in 1995, [Defendant] intended not to perform. To the direct contrary, at the time of making the representation, a reasonable inference may be drawn from the stipulations that when [Defendant] made the representations and warranty at the time of the sale, he had every belief that he would live up to the representations and warranties." (Emphasis added.)

Defendant is simply wrong, however, when it says we must reverse because Plaintiff did not prove Defendant intended from the beginning to default at some time on its promise of a lifetime warranty. Such an intent is not an element of an MMPA case. This follows from a reading of the last sentence of section 407.020.1: "Any act, use or employment declared unlawful by this subsection violates this subsection whether committed before, during or after the sale, advertisement or solicitation." (Emphasis added.) Thus, the fact that Defendant's refusal to honor the warranty came after the sale is of no consequence.

Defendant's Point II argument also ignores the plethora of case law holding that the MMPA serves as a supplement to the definition of common law fraud; it eliminates the need to prove an intent to defraud or reliance. See, e.g., Clement v. St. Charles Nissan, Inc., 103 S.W.3d 898, 899 (Mo.App.2003). See also 15 CSR 60-8.020(2).⁶ Consequently, Defendant's argument that the evidence failed to show a connection between the sale and some sort of "unfairness" at the time of the transaction is unavailing.⁷

The Point II question that remains is this: Can Defendant's failure to honor the lifetime warranty be an actionable "unfair practice" under the MMPA (as the trial court implicitly found)? This court answers, "Yes."

An unfair practice is defined as a practice that either: (1) offends any public policy as it has been established by the Constitution, statutes or common law of this state, or by the Federal Trade Commission, or its interpretive decisions or (2) is unethical, oppressive, or unscrupulous; and (3) presents a risk of, or causes, substantial injury to consumers. 15 CSR 60-8.020. Due to the unrestricted and all-encompassing nature of section 407.020 of the MMPA, the Supreme Court of Missouri, in speaking of the statute, has stated that "the literal words cover every practice imaginable and every unfairness to whatever degree." Ports Petroleum Co., Inc. of Ohio v. Nixon, 37 S.W.3d 237, 240 (Mo. banc 2001) (emphasis added).

"The purpose of Missouri's Merchandising Practices Act is `to preserve fundamental honesty, fair play and right dealings in public transactions.'" State ex rel. Nixon v. Beer Nuts, Ltd., 29 S.W.3d 828, 837[15] (Mo.App.2000) (quoting State ex rel. Danforth v. Independence Dodge, Inc., 494 S.W.2d 362, 368 (Mo.App.1973)). As stated above, the MMPA supplements the definition of common law fraud, eliminating the need to prove an intent to defraud or reliance. Clement, 103 S.W.3d at 899. The statute and the regulation paint in broad strokes to prevent evasion thereof due to overly meticulous definitions. Id. at 900; State ex rel. Webster v. Areaco Inv. Co., 756 S.W.2d 633, 635 (Mo.App. 1988).

In May 2003, Defendant chose to unilaterally breach its contract with Plaintiff by refusing to honor the lifetime warranty. We believe this was an "unfair practice" within the meaning of the MMPA. To start with, this was not a "one-time" contract breach; it was the repudiation of a "lifetime" obligation. When Defendant chose, for the sake of money and its convenience, to break its promise to Plaintiff, it, in effect, chose to commit a breach each time a problem arises with the unit in the future. Considering the difficulties with the unit in the past, the future problems are a distinct possibility.

There is sufficient evidence here to support a finding that Defendant preyed on unsophisticated consumers, inducing them to buy its products on the promise that the units would work for a "lifetime" or the problem would be fixed. When this promise turns out to be untrue, who should bear the burden? Again, there is evidence from which the trial...