Seekings v. Jimmy GMC of Tucson, Inc.

• Decision Date: 25 November 1981
• Docket Number: No. 15479-PR,15479-PR
• Citation: 638 P.2d 210,130 Ariz. 596
• Parties: , 32 UCC Rep.Serv. 1450 Robert L. SEEKINGS and Ida F. Seekings, husband and wife, Appellees/Cross Appellants, v. JIMMY GMC OF TUCSON, INC., dba Jimmy Recreational Center; and Beaver Coaches, Inc., Appellants/Cross Appellees.
• Court: Arizona Supreme Court

Page 210

638 P.2d 210

130 Ariz. 596, 32 UCC Rep.Serv. 1450

Robert L. SEEKINGS and Ida F. Seekings, husband and wife, Appellees/Cross Appellants, v. JIMMY GMC OF TUCSON, INC., dba Jimmy Recreational Center; and Beaver Coaches, Inc., Appellants/Cross Appellees.

No. 15479-PR.

Supreme Court of Arizona, In Banc.

Nov. 25, 1981.

Rehearing Denied Jan. 6, 1982.

Alpert & Fein, P. C., by James A. Fein, K. C. Stanford, Tucson, for appellees/cross appellants

Johnson, Dowdall & Payne, by Tanis A. Duncan and Richard J. Dowdall, Tucson, for appellant/cross appellee Jimmy GMC of Tucson, Inc.

Bilby, Shoenhair, Warnock & Dolph, P. C., by Dwight M. Whitley, Jr., Tucson, for appellant/cross appellee Beaver Coaches, Inc.

GORDON, Justice:

Plaintiffs/appellees/cross appellants (hereinafter appellees) Robert and Ida Seekings sued defendants/appellants/cross appellees (hereinafter appellants). They alleged On April 20, 1977, appellees went to appellant Jimmy GMC of Tucson, Inc. (hereinafter Jimmy GMC) to buy a motor home. They contracted to purchase a Four Winds motor home and traded in their Avco motor home for a $5,800.00 credit. When appellees later returned to pick up the Four Winds vehicle, it would not start. They refused to accept the Four Winds vehicle and demanded return of their trade-in.

breach of contract, breach of express warranty, breach of implied warranty, fraud, and consumer fraud.

Jimmy GMC told appellees that their trade-in had already been sold but that they could apply the credit to another motor home. On May 1, 1977, appellees agreed to purchase a motor home manufactured by appellant Beaver Coaches, Inc. (hereinafter Beaver). Jimmy GMC had bought the vehicle from Beaver. Beaver expressly warranted the motor home against defects in workmanship and material. Jimmy GMC was Beaver's authorized agent for warranty work, but it disclaimed all express or implied warranties by itself. Some of the optional equipment added to the vehicle at appellees' request came with express warranties from the manufacturers, and appellees purchased a five-year power train warranty from Jimmy GMC.

The Beaver motor home had numerous problems. When appellees took their first trip in the vehicle, they discovered that the gas gauge and power generator did not work, the furnace would not start, the carburetor did not function properly, and the gas mileage was poor. Appellees returned the vehicle on May 23 to Jimmy GMC where it was worked on for five days. Apparently, not all of these problems were cured, and subsequently appellees complained that among other things, the passenger door was drafty, the motor stalled, the air conditioner malfunctioned, and sewage backed up into the bathtub. Appellees returned the motor home to Jimmy GMC for warranty work on June 1, June 16, and June 27.

Some of the defects were repaired, but others were not. Finally, on September 6, 1977, appellees' attorney sent a letter of revocation of acceptance ¹ to Jimmy GMC; a similar letter was sent to Beaver on October 5, 1977. The letters detailed the remaining uncured problems, which included an engine that was difficult to start and would stall out at high altitudes, an improperly functioning power plant, and an improperly fitted passenger door. Appellees filed their complaint on December 12, 1977.

On April 6, 1978, appellants' representatives, with appellees' consent, went to appellees' home to inspect the motor home, apparently in an attempt to settle the dispute. After taking twenty-five to thirty minutes to get the vehicle started, appellants' representatives returned it to Jimmy GMC for more work. On May 15, 1978, appellant presented appellees with a list of defects which appellants attempted to cure. Appellees initialed the items they found cured but noted that a door shade was not yet satisfactory, the passenger door was still drafty, and the engine and auxiliary generator were still not functioning properly. When appellees drove the vehicle from Tucson to Phoenix in June, 1978, the dash air conditioner also failed.

The case was tried to the court alone. Before the case was submitted for decision, the trial judge ordered appellees to elect as a remedy either revocation of acceptance or damages for breach of warranty or contract. Appellees chose to press for revocation of acceptance. The trial judge then granted revocation against both appellants and awarded appellees $14,885.10 in incidental and consequential damages.

Appellants appealed to Division Two of the Court of Appeals and appellees cross-appealed. In reversing and remanding in --- Ariz. App. ---, 638 P.2d 223 (1981), the

Court of Appeals held that: (1) revocation of acceptance and incidental and consequential damages cannot be awarded against a manufacturer who has not sold directly to the purchaser; and (2) under the facts of this case, revocation could not be awarded against the seller. Appellees petitioned this Court for review to consider four issues:

(1) Is a purchaser entitled to revocation of acceptance of a product under A.R.S. § 44-2371 against a manufacturer not in privity with the purchaser?;

(2) If the purchaser is not entitled to such revocation; is it bound by its election to sue for revocation?;

(3) Under the facts of this case, was revocation proper as against the seller?; and

(4) If appellees are entitled to revocation against either appellant, should the trial court have awarded loss of use damages? Taking jurisdiction pursuant to A.R.S. § 12-120.24 and Rule 23, Rules of Civil Appellate Procedure, we approve in part and vacate in part the opinion of the Court of Appeals. The case is remanded to the trial court for further proceedings consistent with this opinion.

REVOCATION AGAINST THE MANUFACTURER

Relying on Durfee v. Rod Baxter Imports, Inc., 262 N.W.2d 349 (Minn.1977), appellees argue that the Court of Appeals erred in reversing the trial court's grant of revocation of acceptance against the manufacturer Beaver. The Durfee court, liberally administering the remedies of the Uniform Commercial Code (U.C.C.), see A.R.S. § 44-2206, held that a manufacturer who indirectly profits from the sale of a product by its distributor can be sued for revocation of acceptance of that product. We believe Durfee is contra the plain meaning of the U.C.C.

The rights of aggrieved buyers under the U.C.C. are enumerated in A.R.S. §§ 44-2390 to 44-2396. All of the rights concern what the buyer is entitled to as against the "seller." A.R.S. § 44-2303(A)(4) defines "seller" as "a person who sells or contracts to sell goods."

Beaver neither sold nor contracted to sell the motor home to appellees. Further, there was no evidence to support a finding that Jimmy GMC was an agent of Beaver for purposes of selling motor homes. Therefore, as Beaver was not in privity with appellees, appellees were not entitled to revocation against Beaver. The Court of Appeals was correct in so holding. Accord Voytovich v. Bangor Punta Operations, Inc., 494 F.2d 1208 (6th Cir. 1974); Conte v. Dwan Lincoln-Mercury, Inc., 172 Conn. 112, 374 A.2d 144 (1976).

By holding that a manufacturer who does not sell to the purchaser cannot be liable for revocation and attendant damages, we follow the logic as well as the letter of the U.C.C. The remedies associated with revocation of acceptance are intended to return the buyer and seller to their presale positions. In general, the buyer is entitled to recovery of the purchase price plus all damages caused by the seller's failure to deliver conforming goods; the seller can recover the goods sold. But a manufacturer does not receive the buyer's purchase price and no longer has an ownership interest in the goods sold. In fact, in the instant case, Jimmy GMC made several modifications to the vehicle, at appellees' request, after it left Beaver's factory. Thus, the manufacturer logically cannot share the seller's burden or benefit in returning the contracting parties to their presale positions.

ELECTION OF REMEDIES

Appellees argue that if revocation of acceptance is unavailable against Beaver, then their election to sue for revocation was no election at all as to Beaver. They argue that they should now be permitted to sue Beaver for damages for breach of warranty. Beaver has not responded to this argument. We do not consider appellees' argument because we find even if the trial court erred in forcing appellees to make an election to sue either for revocation or for Our opinion in Flory v. Silvercrest Industries, Inc., 129 Ariz. 574, 633 P.2d 383 (1981), precludes a U.C.C. warranty claim against Beaver for the same reason that a revocation of acceptance claim is precluded-Beaver is not in privity with appellees. But as we held in Flory, lack of privity between a manufacturer and retail purchaser does not preclude a claim outside the U.C.C. for breach of express warranty. A.R.S. § 44-2203 would allow such a traditional action, and logic precludes rendering meaningless a manufacturer's express warranty to a retail purchaser.

damages for breach, ² appellees may no longer press the damages claim.

We note, however, that appellees are not entitled to inconsistent or double recoveries. Because appellees have returned the vehicle and recovered the purchase money paid, they may not also receive damages for breach of warranty which are predicated on the buyer's retention of the nonconforming goods.

Arguably, if due to any breach Beaver could be held jointly liable at common law for the incidental and consequential damages suffered by appellees, Beaver could still be sued for breach of an express non-U.C.C. warranty to recover these special damages. Beaver cannot be held liable for such damages, however. Beaver's express warranty contains this conspicuous clause: "Beaver Coaches, Inc. shall not be liable for consequential damages, including but not limited to loss of use of the unit, resulting from a breach of any written or implied warranty on any Beaver Coaches unit."...