Stratton-Baldwin Co., Inc. v. Brown

• Decision Date: 14 February 1977
• Docket Number: STRATTON-BALDWIN,No. 11107,11107
• Citation: 343 So.2d 292
• Parties: COMPANY, INC. v. Jim BROWN, d/b/a Jim Brown Carpets.
• Court: Court of Appeal of Louisiana — District of US

Page 292

343 So.2d 292

STRATTON-BALDWIN COMPANY, INC. v. Jim BROWN, d/b/a Jim Brown Carpets.

No. 11107.

Court of Appeal of Louisiana, First Circuit.

Feb. 14, 1977.

Rehearing Denied March 21, 1977.

Michael E. Nolan, Vance E. Ellefson, New Orleans, for plaintiff and defendant in reconvention Stratton-Baldwin Company, Inc., Appellee.

Charest D. Thibaut, III, Baton Rouge, for defendant, third party plaintiff and plaintiff in reconvention Jim Brown, etc., appellee.

H. Evans Scobee, Baton Rouge, for third party defendant Congoleum Corp., appellant.

Before LANDRY, COLE and CLAIBORNE, JJ.

LANDRY, Judge.

Appeals have been taken herein by Stratton-Baldwin Company, Inc. (Stratton), a distributor of carpeting and floor covering, and Congoleum Industries, Inc. (Congoleum), a carpeting manufacturer, from judgment against Stratton on reconventional demand of defendant, Jim Brown (Brown), in Stratton's suit against Brown on open account for carpeting and floor materials purchased by Brown, and judgment in favor of Stratton on its third party demand against Congoleum. Brown, although cast in judgment on Stratton's main demand, did not appeal. Brown did, however, timely answer the appeal by Stratton, but failed to answer the appeal taken by Congoleum. We affirm the judgment rendered in Stratton's main demand against Brown. We amend the judgment rendered on Brown's reconventional demand against Stratton by reducing the amount thereof, and also amend the judgment on Stratton's third party demand against Congoleum by reducing same correspondingly.

Stratton sued Brown for $38,171.14, representing the balance due on carpeting, hardward and flooring material sold Brown on open account during the period March 3, 1973, and July 11, 1974. Brown answered admitting the purchases and claiming failure of consideration due to the defective nature of the goods. Brown also reconvenced against Stratton claiming $26,548.29 in expenses allegedly incurred in remedying defects in carpeting and floor covering which Brown sold to his retail customers. In addition, Brown third partied Congoleum, as manufacturer of the allegedly defective materials, asserting Congoleum's solidary liability with Stratton. Besides his expenses, Brown seeks recovery of damages for loss of profits and business reputation, and mental anguish.

As Defendant in reconvention, Stratton third partied Congoleum seeking judgment against Congoleum for whatever sum Stratton might be cast in Brown's reconventional demand. Stratton also filed an exception of no cause of action to Brown's reconventional demand for loss of profits, damage to business reputation and mental anguish. Lastly, Stratton filed an exception of prescription to all of Brown's claims on the ground that Brown had knowledge of the defects more than one year prior to the filing of Brown's reconventional demand. Congoleum filed an exception of no cause and no right of action to Stratton's third party demand.

The trial court sustained Stratton's exception of no cause of action to Borwn's claim for loss of profits, loss of business reputation, and mental anguish. The lower court did not pass upon either Stratton's exception of prescription or Congoleum's exception of no cause and no right of action.

Judgment was rendered below in favor of stratton against Brown in the pre-trial stipulated sum of $37,306.04, and in favor of Brown, in redhibition, on his reconventional demand against Stratton, in the amount of $21,219.35, based on the finding that Brown established retail sales in the amount of $29,946.50, for which Brown was paid in full by his customers but concerning which Brown received complaints. From this sum the trial court deducted credits in the amount of $8,727.15 allowed Brown by Stratton and/or Congoleum. Judgment was rendered in favor of Stratton against Congoleum in the sum of $21,219.35 on Stratton's third party demand. Brown's demands against Stratton and Congoleum for alleged loss of profits, loss of business reputation and mental anguish, were rejected.

On appeal it is conceded by all concerned; (1) the trial court correctly found Brown made total retail sales in the sum of $29,946.50 concerning which complaints were received from Brown's customer; (2) Brown expended the sum of $12,685.55 in attempting to repair defects and satisfy his customers; and, (3) Brown was allowed credit in the aggregate of $8,727.15 by Stratton and/or Congoleum in offset of Brown's expenditures to satisfy his customers.

The record establishes that Brown is experienced in the field of floor coverings and carpeting. Between 1969 and 1974, Brown purchased numerous floor covering items, including carpeting and hard surface floor coverings and products, from Stratton, a distributor of such items. The volume of Brown's purchases made him one of Stratton's preferred customers. In the period 1971--1973, approximately 10% Of Brown's purchases consisted of 2,824.8 square yards of a material known as 'Monogram Cushion Vinyl', a 1/4$ thick vinyl floor covering, and 'New Dimension' floor covering, of which 2,203 yards were allegedly defective. Congoleum manufactured all of the products in question and sold them through its distributor, Stratton. It is conceded that the items in question were defective in that the materials delaminated, the seams separated within a few months of installation and pulled away from the wall boards, and bubbles appeared under the hard floording, all of which made the products unsightly and at times hazardous to Brown's customers, the eventual purchasers and users.

Brown became aware of the defects in 1971, when he began receiving complaints from his customers. Nevertheless, Brown continued to purchase the same materials in reliance upon Stratton's assurances the products were sound and that the difficulties reported were probably due to faulty installation. Brown felt that, because he had in his employ two capable and experienced installation men, he would not experience the same degree of difficulties then being encountered by other floor covering retailers handling these same products. From 1971 to early 1973, the complaints received by Brown were minimal.

When a complaint was received Brown made diligent efforts to remedy the defect encountered. He then reported each incident to Stratton, accompanied by an explanation of the items of expense incurred in effecting the required repairs. Stratton refered each instance to Congoleum and upon approval, Congoleum issued Stratton a credit memo for the goods involved. Stratton then credited Brown's account for the same merchandise. In some instances, Stratton gave Brown credit for merchandise before obtaining Congoleum's approval, because of Brown's preferred customer status. To maintain his business reputation Brown, in many instances, took corrective measures before receiving assurance from Stratton that he would be credited with the expense thus incurred.

Of the 2,824.8 square yards of Monogram Cushion Vinyl involved, Brown received complaints concerning 2,203 yards, or 80% Of the sales of this product, as compared to 12% Complaints received by retailers of this same product in Brown's trade area. In an effort to solve the problem for the mutual benefit of all concerned, several meetings were held between Brown and representatives of Stratton and Congoleum. On three occasions Congoleum changed the consistency of the adhesive which it recommended be used in installation, which new product Congoleum believed would minimize fabric shrinkage and consequent separation of seams. Despite all attempts at corrective measures, continued and increasing complaints were received concerning Monogram Cushion Vinyl. As a result, Congoleum ceased marketing this product in 1974.

In 1973, Brown began experiencing financial difficulties and became delinquent in his account with Stratton. Stratton pressed for payment and Brown countered with a demand that Stratton and Congoleum provide additional assistance in making repairs and reimburse Brown further for expenses. On April 11, 1974, a meeting was held to discuss the matter, at which time Congoleum's representative informed Brown that no credit, refund or assistance was due Brown for such repairs or replacement as Brown then complained about. Brown discontinued payment on his account with Stratton, and this suit ensued.

Congoleum and Stratton argue: (1) Brown's reconventional demand is not in redhibition because Brown's customers, the ultimate purchasers and users of the goods involved, are in possession of the merchandise, which Brown cannot return, and none of these individuals have sought rescission of Brown's sales to them; (2) Brown's claim is in contract or tort and, in either event he may not recover for loss of profits, damage to business reputation or mental anguish; (3) Brown's judgment in reconvention against Stratton should be reduced to $3,958.40 because Brown incurred stipulated expenses of $12,685.55 repairing defective flooring and carpeting sold to customers from whom complaints were received and against which Brown has received credit in the sum of $8,727.15; and, (4) alternatively, if Brown's recovery is in redhibition the award to him is excessive because under the doctrine of redhibition Brown is entitled only to be made whole.

Stratton and Congoleum suggest that since Brown has been paid in full, including his profit, on all sales made concerning which complaints were received, Brown is entitled to recover, under...