Southern of Rocky Mount, Inc. v. Woodward Specialty Sales, Inc.

• Decision Date: 16 June 1981
• Docket Number: No. 8010SC557,8010SC557
• Citation: 279 S.E.2d 32,52 N.C.App. 549
• Court: North Carolina Court of Appeals
• Parties: , 34 UCC Rep.Serv. 77 SOUTHERN OF ROCKY MOUNT, INC. v. WOODWARD SPECIALTY SALES, INC.; Ingersoll-Rand Company; and Emerson Electric Company.

Page 32

279 S.E.2d 32

52 N.C.App. 549, 34 UCC Rep.Serv. 77

SOUTHERN OF ROCKY MOUNT, INC. v. WOODWARD SPECIALTY SALES, INC.; Ingersoll-Rand Company; and Emerson Electric Company.

No. 8010SC557.

Court of Appeals of North Carolina.

June 16, 1981.

Brenton D. Adams and Blanchard, Tucker, Twiggs, Denson & Earls by Charles F. Blanchard, Raleigh, for plaintiff-appellee.

Harris, Cheshire, Leager & Southern by Samuel O. Southern, Raleigh, for defendant-appellant, Woodward Specialty Sales, Inc.

WHICHARD, Judge.

Defendant contends that the testimony of plaintiff's expert mechanical engineer, Dr. Carl. F. Zorowski, constituted a material variance from the allegations of plaintiff's complaint and therefore that the court erred in (1) refusing to limit his testimony, (2) denying defendant's motion for continuance, and (3) denying defendant's motions for directed verdict, judgment notwithstanding the verdict, and new trial. Dr. Zorowski testified that in his opinion the fire which destroyed plaintiff's shop originated in the terminal or juncture box of the air compressor and resulted from an arc across a broken or separated electrical connection. Defendant argues that the witness' testimony constitutes a fatal variance from the allegations in plaintiff's complaint that the fire originated in the control box of the motor drive unit of the air compressor.

The enactment of the North Carolina Rules of Civil Procedure, especially Rule 15(b), virtually "destroy(ed) the former strict code doctrine of variance." Roberts v. Memorial Park, 281 N.C. 48, 58, 187 S.E.2d 721, 726 (1972); see Note, 12 Wake Forest U.L.Rev. 405 (1976). Rule 15(b) provides for amendment of the pleadings by express or implied consent "(w)hen issues not raised by the pleadings are tried." G.S. 1A-1, Rule 15(b). The need for amendment does not arise, however, unless the evidence raises issues not pleaded. Under the notice theory of the Rules, pleadings need not contain detailed factual allegations to raise issues. G.S. 1A-1, Rule 8; Sutton v. Duke, 277 N.C. 94, 176 S.E.2d 161 (1970).

Although plaintiff did allege that the fire originated "in the control box of the motor drive unit for the ... air compressor," plaintiff also alleged that the air compressor was neither merchantable nor fit for the particular purpose for which plaintiff purchased it, because it contained "latent defects," and "because of the absence of proper safety devices." Under the notice pleading theory of Rule 8(a)(1), plaintiff's allegations of latent defects sufficiently raised the issue of breach of implied warranty. G.S. 1A-1, Rule 8(a)(1); see Gore v. Ball, Inc., 279 N.C. 192, 182 S.E.2d 389 (1971); G.S. 25-2-314. Dr. Zorowski's testimony tended to establish the existence of a latent defect. The testimony related to the issue of breach of the implied warranty. It thus did not raise an issue not pleaded, and the court did not err in admitting the testimony or in denying defendant's motion based on material variance.

Rulings on motions to continue rest in the discretion of the trial court and will not be reversed absent abuse of discretion. Wood v. Brown, 25 N.C.App. 241, 212 S.E.2d 690 review denied 287 N.C. 469, 215 S.E.2d 626 (1975). Dr. Zorowski's testimony related to an issue raised by the complaint. Defendant utilized none of the available methods of discovery to obtain greater specificity from plaintiff regarding its allegations. Under these circumstances we find no abuse of discretion in the denial of defendant's motion to continue based on alleged "surprise" as to this testimony.

Defendant contends the court should have granted its motions for directed verdict, judgment notwithstanding the verdict and new trial for one or more of the following reasons: (1) plaintiff failed to show a "sale" by defendant to plaintiff of the air compressor and therefore no implied warranties could have arisen; (2) plaintiff failed to show that a defect existed at the time of sale ; or (3) the evidence was too speculative to go to the jury. The court properly denied the motions for directed verdict and judgment notwithstanding the verdict if, when it viewed the evidence in the light most favorable to plaintiff and gave plaintiff the benefit of all reasonable inferences, it found " 'any evidence more than a scintilla' to support plaintiff's prima facie case in all its constituent elements." 2 McIntosh, N.C.Practice and Procedure § 1488.15 (2d ed. Phillips Supp.1970); see also Gwyn v. Motors, Inc., 252 N.C. 123, 127, 113 S.E.2d 302, 305 (1960). To present a prima facie case of breach of implied warranty under G.S. 25-2-314 plaintiff must produce any evidence more than a scintilla (1) that an implied warranty covered the goods in question, (2) that the seller breached the warranty in that the goods were not merchantable at the time of sale, and (3) that the breach proximately caused the injury and loss sustained by plaintiff. G.S. 25-2-314; 25-2-607(4); Rose v. Motor Sales, 288 N.C. 53, 60-61, 215 S.E.2d 573, 577-578 (1975); Cockerham v. Ward and Astrup Co. v. West Co., 44 N.C.App. 615, 624-625, 262 S.E.2d 651, 658 review denied 300 N.C. 195, 269 S.E.2d 622 (1980).

As to the first element, "(u)nless excluded or modified (§ 25-2-316), a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." G.S. 25-2-314(1). In its answer, defendant admitted that it was a corporation engaged in the business of wholesale and retail selling of air compressors, thereby admitting that it was both a "seller" and a "merchant" of air compressors. See G.S. §§ 25-2-103(1)(d); 25-2-104(1); 25-1-201(28) and (30). Defendant argues no implied warranty arose as between it and plaintiff because the air compressor in question was shipped to plaintiff's plant directly from the manufacturer's factory and did not physically pass from defendant to plaintiff. G.S. 25-2-314(1) does not require a physical passing of goods from seller to buyer, however. The implied warranty arises upon a "contract for ... sale." G.S. 25-2-314(1). ² Defendant admitted that the manufacturer "sold" the air compressor in question to defendant and thus that defendant acquired title to it. See G.S. 25-2-106. Defendant also admitted that plaintiff purchased the compressor from it and that it billed plaintiff for the unit. Plaintiff's witness, Burton Edward Walkup, an employee of defendant, testified that he and a representative of plaintiff engaged in extensive discussions in 1973 and 1974 concerning the sale by defendant to plaintiff of an air compressor, and that in the spring of 1974 he and plaintiff's representative reached an agreement regarding the sale of the "Pac Air 60" compressor in question for a purchase price of $7,135.00. The fact that the compressor did not pass through defendant's warehouse, but was shipped directly from the manufacturer's factory to plaintiff, does not render the transaction something other than a contract for sale. Defendant had title to the compressor, and the evidence indicated that it contracted to pass title to plaintiff. Plaintiff's evidence indicated that defendant made no express warranties to plaintiff concerning the air compressor, and therefore that the parties did not exclude or modify the 25-2-314 implied warranty. See G.S. 25-2-316. Viewed in the light most favorable to plaintiff, the evidence and admissions indicate that an implied warranty of merchantability covered the air compressor which plaintiff purchased.

As to the second element, breach of the implied warranty, plaintiff must offer evidence that the goods in question were not merchantable at the time of sale. Rose, 288 N.C. at 61, 215 S.E.2d at 578; Cockerham, 44 N.C.App. at 625, 262 S.E.2d at 658. Plaintiff can establish lack of merchantability by showing, inter alia, that the goods were not fit for the ordinary purpose for which such goods are purchased because they contained a defect at the time of sale. G.S. 25-2-314(2)(c). Plaintiff's witness, Dr. Zorowski, testified that in his opinion there was a defect in the connection of the service wire to the motor wire inside the terminal or juncture box of the compressor, which could have been aggravated by the vibration of the machine over the two year period of almost continuous operation of the...