Stream v. Sportscar Salon, Ltd.

• Decision Date: 25 July 1977
• Citation: 91 Misc.2d 99,397 N.Y.S.2d 677
• Parties: , 22 UCC Rep.Serv. 631 Barbara B. STREAM, Plaintiff, v. SPORTSCAR SALON, LTD., Defendant.
• Court: New York City Court

Page 677

397 N.Y.S.2d 677

91 Misc.2d 99, 22 UCC Rep.Serv. 631

Barbara B. STREAM, Plaintiff, v. SPORTSCAR SALON, LTD., Defendant.

Civil Court of the City of New York, Queens County.

July 25, 1977.

Robert G. Smith, New York City, for plaintiff.

Jerome M. Ginsberg, Jamaica, for defendant.

DECISION

CHARLES H. COHEN, Judge.

In this action the buyer of a used car seeks to recover the purchase price from the seller based upon a claim of breach of warranty. Plaintiff also sued for incidental expenses but submitted no proof in support of that claim or in support of a cause of action for fraud seeking punitive damages.

Following a contract dated February 28, 1976 for the sale and purchase of this used car, plaintiff on March 5, 1976 paid to defendant the balance of the purchase price which totalled $2,688 (although the bill of sale dated March 5, 1976 set forth a price of $2,750.50). On or about March 10, 1976 the car was delivered to plaintiff who accepted it.

On or about April 12, 1976 the car broke down after having been driven about 300 miles. Prior to the breakdown, the engine had been losing oil and plaintiff's son had been adding oil. Defendant's employee, who examined the car after it had been towed to defendant's premises on April 12, 1976, stated that the engine had "seized" and was out of oil. After some discussion, defendant agreed to put another engine in the car. On April 20, 1976 plaintiff, after making reference to the defective engine as well as to other defects such as a defective odometer, notified defendant that plaintiff elected to "rescind" the sale and demanded the return of the purchase price. This notice further stated that plaintiff would consider "re-accepting" the car "if and when all the conditions described above are corrected, all without prejudice" to the rescission. Defendant performed work on the car and on May 1, 1976 plaintiff's son picked it up. A few days later, with the engine continuing to leak oil, the car again broke down. After the car was examined by plaintiff's mechanic, it was again towed and delivered to defendant's premises. At about the same time, on May 6, 1976, the car's certificate of title was delivered to defendant and plaintiff notified defendant that plaintiff "elected . . . to stand upon" the previous notice of rescission and again demanded the return of the purchase price and stated that upon defendant notifying plaintiff "that the funds are available, we shall arrange to have the check and license plates picked up." The car remains at defendant's premises with plaintiff's license plates apparently still on it.

Issues are raised concerning (1) the condition of the car, (2) the warranties made and their breach, (3) the recovery of the purchase price as a remedy upon a breach of warranty, (4) the recovery of the purchase price by plaintiff, and (5) the jurisdiction of this court to direct the recovery of the purchase price.

1. The Condition of the Car

Defendant's service manager testified concerning the condition of the car. He claimed that defendant had put another engine in the car when it was returned the first time; that the car had some minor defects which were repaired; and that the car is now in good order with no defects. Plaintiff's mechanic, who had examined the car during the first week of May, 1976, testified that there were large amounts of oil spread over the engine; that the engine would not start; and that he made a compression test and found that the compression was so low as to make the car inoperable. He further testified that this low compression indicated that something was wrong with the engine but that he did not know exactly what was wrong since this could only be determined by removing the engine which, because of the expense involved, was not done.

Based upon the testimony concerning the breakdowns of the car and the attendant oil leaks, and buttressed by the testimony of plaintiff's mechanic, the court finds that the engine was defective when the car was sold by defendant to plaintiff, that the engine subsequently installed by defendant was defective and that the car was inoperable each time it was towed to defendant's premises.

The court notes defendant's argument to the effect that plaintiff did not prove that there was a defective engine because plaintiff submitted no proof at all concerning any defect in the first engine and that, with respect to the replacement engine, plaintiff's mechanic did not determine what was wrong with it. However, the determination made by plaintiff's mechanic, which the court accepts, concerning the low compression of the replacement engine and the inability to start that engine which was covered with large amounts of oil, is sufficient to support a finding that the replacement engine was defective.

Even in the absence of expert testimony and even without proof of a specific defect, the testimony presented by other witnesses concerning the breakdowns and the oil leaks, supports a finding that the car was defective when sold and was still defective after the replacement engine was installed.

The court in Jackson v. Melvey, 56 A.D.2d 836, 837, 392 N.Y.S.2d 312, 314, a personal injury action sounding in negligence and involving a third party claim of breach of warranty, declared:

". . . As noted by the Court of Appeals in the leading case of Codling v. Paglia, 32 N.Y.2d 330, 345 N.Y.S.2d 461, 298 N.E.2d 622, the plaintiff is not required to prove the specific product defect and his proof may be circumstantial in nature. Thus, the defect may be inferred from proof that the product did not perform as intended by the manufacturer. There was, in truth, expert testimony on both sides in the Codling trial with respect to an alleged specific defect in the power steering system of Paglia's vehicle. However, it was only Paglia's own testimony, as to his inability to steer the vehicle to the right, which the Court of Appeals recounted in upholding the jury finding of manufacturer liability, since proof of a specific defect was not required. At bar, the Melvey vehicle was only three weeks old at the time of the accident and, more importantly, had concededly been brought back to the dealer with a complaint of a steering problem only one week after its purchase. These facts alone present a far stronger case than Codling, for Paglia's vehicle was four months old at the time of his accident and there had been no prior steering difficulties. . . ."

See also Swensson v. New York Albany Despatch Corp., 309 N.Y. 497, 131 N.E.2d 902; Markel v. Spencer, 5 A.D.2d 400, 171 N.Y.S.2d 770, aff'd 5 N.Y.2d 958, 184 N.Y.S.2d 835, 157 N.E.2d 713; but cf. Curtis v. Fordham Chrysler Plymouth, Inc., 81 Misc.2d 566, 568, 364 N.Y.S.2d 767, 770.

The fact that this is not a personal injury action or what is generally called a products liability action is not significant. This action is one for breach of warranty presenting the question of whether a product the engine of a car was defective. The breakdown of the car a few weeks after its sale to plaintiff, particularly when the engine had been losing large amounts of oil, supports a finding that the engine was defective when sold. The second breakdown, again with the loss of large amounts of oil, this time only a few days after defendant installed a replacement engine, even more readily supports a finding of a defective engine.

2. The Warranties Made and Their Breach

The contract of sale on defendant's form dated February 28, 1976 states in paragraph 7: "It is expressly agreed that there are no warranties, express or implied, made by either the dealer or the manufacturer on the motor vehicle, chassis or parts furnished hereunder. . . ." The bill of sale on defendant's form dated March 5, 1977 has stamped on it the statement "Limited Used Car Warranty" without further explanation. In another one of defendant's forms entitled "One Year Mechanical Guarantee" dated March 9, 1976 (referred to as a warranty in testimony given by defendant's service manager) and signed by both parties, defendant "agrees that it will protect the purchaser from any cost of repairs other than normal maintenance and wear on the vehicle . . . during the term of this guarantee for one repair or replacement on each of the specified parts, subject to the terms and conditions hereinafter set forth: A. Engine . . . This guarantee is only valid for a mechanical failure. This does not cover normal wear." While this paper further states that "You have the finest guarantee on your car that is offered anywhere in the world" and also states that this is defendant's "famous one-year mechanical guarantee on parts and labor. This guarantee guards you against unforseen (sic) costly repairs on your car for one full year," it contains many exclusions and conditions including one stating that the limit of liability for loss shall not exceed "either (1) the actual cash value of the vehicle at the time of loss or (2) the reasonable value of the repair or replacement including labor thereon" and another stating that defendant "assumes no liability whatsoever except for the terms of the guaranteed (sic) as expressly stated herein. Representatives or agents of Sportscar Salon, Ltd., are not authorized to amend or change either verbally or in writing the terms and conditions of this guarantee."

Defendant does not rely on the express denial of warranties as set forth in the contract of sale. It could hardly do so since the subsequent bill of sale it issued declares that there is a "Limited Used Car Warranty" and the "Guarantee" makes what defendant itself regards as certain warranties. Indeed, as already noted, defendant's service manager in his testimony referred to warranties made with respect to the car. Considering the fact that these papers were forms prepared by defendant, any ambiguity concerning their interpretation must be construed against defendant and in favor of plaintiff. Goldfield Corp. v. General Host Corp., ...