Snelten v. Schmidt Implement Co.

Decision Date13 March 1995
Docket NumberNo. 2-94-0776,2-94-0776
Citation269 Ill.App.3d 988,647 N.E.2d 1071,207 Ill.Dec. 578
Parties, 207 Ill.Dec. 578, 26 UCC Rep.Serv.2d 1092 Donald SNELTEN, Plaintiff-Appellant, v. SCHMIDT IMPLEMENT COMPANY, Defendant-Appellee.
CourtUnited States Appellate Court of Illinois

David L. Cwik, Chicago, for Donald Snelten.

Michael B. Kilgallon, D. Kendall Griffith, Joshua G. Vincent, Kristin E. Hutson, Hinshaw & Culbertson, Chicago, for Schmidt Implement Co.

Justice HUTCHINSON delivered the opinion of the court:

Plaintiff, Donald Snelten, appeals from the trial court's order dismissing his complaint with prejudice. In his amended two-count complaint, Snelten alleged defendant, Schmidt Implement Company, was negligent in that it failed to inspect properly, observe, or discover that the used tractor it sold to plaintiff had been altered in a manner which bypassed the neutral safety switch. Plaintiff alleged he was hurt as a result of that alteration because plaintiff started the tractor while it was in gear and it ran over him, fracturing his pelvis. The second count of the complaint alleged negligent misrepresentation. The complaint stated defendant represented in writing the equipment had not been modified or altered and it had been serviced, adjusted and inspected according to the manufacturer's recommendations. Plaintiff further alleged that oral representations had been made by the salesman which plaintiff claims clarify the written notation that the tractor was sold "as is." The trial court originally dismissed the complaint without prejudice, but then dismissed it with prejudice when plaintiff did not file an amended complaint but instead filed a motion to reconsider. We reverse.

On appeal, plaintiff's complaint does not rest on an assumption that defendant had a common-law duty to inspect; plaintiff acknowledges the law does not impose such a duty when the dealer is selling used equipment. (See Peterson v. Lou Bachrodt Chevrolet Co. (1975), 61 Ill.2d 17, 21, 329 N.E.2d 785; Rahn v. Gerdts (1983), 119 Ill.App.3d 781, 786-87, 74 Ill.Dec. 378, 455 N.E.2d 807.) Plaintiff relies on the premise that "liability can arise from the negligent performance of a voluntary undertaking." (Nelson v. Union Wire Rope Corp. (1964), 31 Ill.2d 69, 74, 199 N.E.2d 769.) Plaintiff argues that once a duty is undertaken defendant must perform it with "due care or ' "such competence and skill as [one] possesses." ' " (Frye v. Medicare-Glaser Corp. (1992), 153 Ill.2d 26, 32, 178 Ill.Dec. 763, 605 N.E.2d 557, quoting Cross v. Wells Fargo Alarm Services (1980), 82 Ill.2d 313, 317, 45 Ill.Dec. 121, 412 N.E.2d 472, quoting Nelson v. Union Wire Rope Corp. (1964), 31 Ill.2d 69, 74, 199 N.E.2d 769.) Here, plaintiff contends defendant did not. Defendant's position below and here on appeal is that it undertook no duty to inspect the tractor and this is evidenced by the use of the phrase "as is" on the purchase order. Defendant contends the term "as is" implies a warning to the buyer that he may be purchasing a product which has faults. (Overland Bond & Investment Corp. v. Howard (1972), 9 Ill.App.3d 348, 356, 292 N.E.2d 168.) Defendant relies on the case of Pelc v. Simmons (1993), 249 Ill.App.3d 852, 189 Ill.Dec. 353, 620 N.E.2d 12, to argue that we cannot consider oral representations which take away from the meaning of "as is."

We agree with plaintiff that Pelc does not support defendant's argument. Pelc only holds that the defendant's prior oral representation, that he had rebuilt the engine, did not create an express warranty where the car was sold "as is." (Pelc, 249 Ill.App.3d at 856, 189 Ill.Dec. 353, 620 N.E.2d 12.) Furthermore, unlike the case of Pokrajac v. Wade Motors, Inc. (1954), 266 Wis. 398, 63 N.W.2d 720, cited by defendant, where the court held there was no duty of the seller to the buyer of the used car in light of the "as is" language on the contract, here the contract contained additional language at odds with the "as is" language. We must determine whether these extra representations may have negated the usual meaning of "as is" such that defendant could have voluntarily undertaken a duty to use due care in its inspection of the tractor and whether plaintiff could justifiably rely on the representations made such that a cause of action for negligent misrepresentation was sufficiently alleged.

This is a case of first impression in Illinois. Prior cases dealing with "as is" language have involved (1) a conflict between a prior oral affirmation or description and later written exclusionary language (Pelc, 249 Ill.App.3d 852, 189 Ill.Dec. 353, 620 N.E.2d 12); (2) exclusionary language directly supported by consideration on the seller's part, thereby indicating the disclaimer was bargained for (Van Gessel v. Folds (1991), 210 Ill.App.3d 403, 155 Ill.Dec. 141, 569 N.E.2d 141); or (3) a prior written affirmation or description that was subsequently omitted from the final contract (Lake Bluff Heating & Air Conditioning Supply, Inc. v. Harris Trust & Savings Bank (1983), 117 Ill.App.3d 284, 72 Ill.Dec. 665, 452 N.E.2d 1361). Here, we confront a conflict between express written affirmations and descriptions and an "as is" provision, both appearing within the four corners of the final contract.

In this case, the purchase order had a handwritten notation stating "Sold As Is With No Guaranties" and also, "Note: Some Items On Tractor Don't Work." Also on this document was a section entitled "Dealer's Check & Customer's Acceptance" (dealer's check), and the parties now disagree about the meaning of this section. That section read:

"Yes No

All guards and shields in place and points of danger protected X

Rollover Protection Structure (ROPS) in place X

Equipment modified or altered (Give details and date on reverse side) X

Equipment serviced, adjusted, inspected according to manufacturer's X

recommendations

Operator's manual provided: As listed above X

Safe operating and proper servicing instructions given. X"

Under the dealer's check section was the printed statement, "I have received the above equipment, read the above checklist, and inspected the equipment to my satisfaction. I am familiar with its safe operation. I realize that if the equipment is 'USED' it is not expected to perform as, or have features which may be offered on newer models." Plaintiff signed and dated the form below the statement. On another page of the purchase order, a box was checked next to a printed statement that the equipment was sold "as is" and that no warranty of any kind was given.

Reading the purchase order as a whole, we conclude defendant's specific representations contained in the dealer's check section limited the scope of the "as is" language. Here, defendant checked boxes indicating defendant had performed certain acts related to the safe operation of the tractor. The representations that certain safety features were present and that equipment had not been modified or altered, a fortiori included a representation that an inspection had been made. Under these circumstances, the "as is" language did not necessarily mean defendant undertook no duties toward plaintiff.

Defendant urges us to interpret the dealer's check provisions to mean that where the "no" box is checked next to the phrase "equipment modified or altered" defendant did not perform an inspection to determine whether the equipment had been modified or altered. To read these provisions in this manner would mean that by checking the "yes" box next to "[s]afe operating and proper servicing instructions given," defendant was only representing it had checked to see if instructions were given, but did not represent they had been given. This interpretation is unreasonably strained and would render the representations contained in the dealer's check provisions meaningless. It is presumed contracting parties intend all portions of their contract to carry meaning and no portion was meant to be mere surplusage. (See Taber v. Taber (1993), 248 Ill.App.3d 435, 438, 187 Ill.Dec. 931, 618 N.E.2d 522.) We, therefore, decline to adopt defendant's interpretation of the dealer's check provisions. The representations contained in the dealer's check provisions indicate the equipment (1) had not been altered or modified; and (2) had been serviced, adjusted and inspected according to the manufacturer's recommendations.

Contracts should be construed so their various provisions are harmonized and no provision is deemed conflicting with, or repugnant to, another. (Zannis v. Lake Shore Radiologists, Ltd. (1979), 73 Ill.App.3d 901, 906, 29 Ill.Dec. 569, 392 N.E.2d 126.) The "as is" language must be read as limited in its scope, meaning some of the tractor features might not operate correctly although none of the features had been altered or modified. A specific representation that no feature had been altered or modified controls over the more general "as is" language. See Ohio Casualty Insurance Co. v. Tyler (1980), 85 Ill.App.3d 410, 413, 40 Ill.Dec. 846, 407 N.E.2d 77.

Tort and warranty provide avenues of recovery for distinct forms of injury. In negligent misrepresentation actions, damages may only be awarded for physical injuries suffered, or for economic loss if, and only if, the defendant is in the business of supplying information for the guidance of others in their business transactions. (Board of Education v. A,C&S, Inc. (1989), 131 Ill.2d 428, 453-54, 137 Ill.Dec. 635, 546 N.E.2d 580.) Economic loss, without accompanying physical injury, is not generally recoverable in tort. Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill.2d 69, 80-81, 61 Ill.Dec. 746, 435 N.E.2d 443, citing Seely v. White Motor Co. (1965), 63 Cal.2d 9, 18, 403 P.2d 145, 151, 45 Cal.Rptr. 17, 23.

If plaintiff had suffered an economic rather than a physical injury, he would have had to proceed under a warranty theory and defendant could not claim the "as is" language excluded the affirmations and descriptions contained in...

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