Tucson Utility Supplies, Inc. v. Gallagher

• Decision Date: 16 November 1967
• Docket Number: No. 7750,7750
• Parties: TUCSON UTILITY SUPPLIES, INC., an Arizona corporation, Appellant, v. Frederick J. GALLAGHER and Marion Gallagher, husband and wife, dba Fred J. Gallagher Construction Co., and Fidelity & Casualty Company of New York, a corporation, Appellees.
• Court: Arizona Supreme Court

Page 629

433 P.2d 629

102 Ariz. 499

TUCSON UTILITY SUPPLIES, INC., an Arizona corporation, Appellant, v. Frederick J. GALLAGHER and Marion Gallagher, husband and wife, dba Fred J. Gallagher Construction Co., and Fidelity & Casualty Company of New York, a corporation, Appellees.

No. 7750.

Supreme Court of Arizona, In Banc.

Nov. 16, 1967.

Scruggs & Rucker, by Edgar F. Rucker and D. Thompson Slutes, Tucson, for appellant.

Johnson, Darrow, D'Antonio, Hayes & Morales, by Lawrence P. D'Antonio and Burt L. Haberman, Tucson, for appellee.

UDALL, Justice:

Plaintiff, Tucson Utility Supplies Inc., commenced this action in the Pima County Superior Court against defendants, Frederick J. Gallagher and Marion Gallagher, and their bonding company, Fidelity and Casualty Company of New York, for money due and owing on a contract. Defendants plead, as an affirmative defense, breach of contract and counterclaimed for breach of warranty. A trial by jury was had, and based upon the verdict, plaintiff was granted judgment against all defendants for $5.733.77, and defendants Gallagher were granted judgment against plaintiff for $7,500. From the judgment granted Gallagher, plaintiff appeals.

In the spring of 1960, Gallagher, hereinafter referred to as defendant, entered into a contract with the City of Tucson to put water pipe into the ground in certain areas of the city. The contract provided that the pipe should meet certain specifications, and in August 1960, Tucson Utilities Supplies, Inc., hereinafter referred to as plaintiff, began furnishing to defendant pipe which supposedly met those specifications. Payments were made on account, and when the job was completed, there was a balance due plaintiff in the amount of $5,733.77.

While the pipe laying was being done, certain of the pipe leaked or blew up. Of the approximately fourteen thousand feet of pipe plaintiff supplied defendant for the job, over one thousand feet was damaged, and upon defendant's request picked up by plaintiff. There was no evidence adduced at trial rebutting defendant's testimony that no credit was allowed him for the damaged sections of pipe. The testimony is conflicting as to the number of pipe failures defendant experienced during the course of the contract. During the period in which work was being performed pursuant to the contract, defendant continually reported to plaintiff that the pipe was bursting before it met the requisite pressure requirements. As a result, plaintiff submitted to the factory an application for credit for seventeen pipe failures at $150 each. The request was approved and the credit was passed on to the account of defendant. During the course of trial, testimony was adduced that in addition to the extra pipe needed, defendant incurred additional expenses for labor, equipment, overhead, lost profit, insurance and for delay as a result of the faulty pipe.

At the close of the case, the jury returned a verdict in favor of the plaintiff for the full amount of its complaint, and a verdict in favor of defendant on its counterclaim. Motions were made by defendants to set-off the judgment of the plaintiff against the judgment of the defendant, and by plaintiff for a new trial. Notice of appeal was subsequently filed by plaintiff, appealing both from the judgment in favor of defendant and from the order denying its motion for a new trial.

Plaintiff initially contends that the trial court erred in failing to grant its motion for new trial on the ground that the verdict in defendant's favor was not sustained by the evidence. It was argued that no evidence was introduced which would justify the jury returning a verdict on the counterclaim in the sum of $7,500, rather it should have returned a verdict in defendant's favor either in excess of $20,000 or in the sum of $9,450 (63 failures $150).

Included in the charge to the jury were instructions to the effect that all losses directly and naturally resulting to defendant in the ordinary course of events from the breach of warranty or such damages as may reasonably be supposed to have been within the contemplation of the parties at the time of making the contract constitute proper elements of damage. See § 44--269, subsec. F, A.R.S. No assignment of error is made with respect to these instructions. Defendant at trial claimed, and put in proof tending to establish such, damages consisting of the following itemized expenses: labor, $4,111.53; equipment, $3,700.35; overhead, $4,371.34; lost profit, $8,769.22; insurance, $403.95; and delay, $5,337.46. In addition evidence was introduced that the parties had worked out a settlement whereby defendant was given credit for seventeen pipe failures at a rate of $150 per failure. Defendant testified that for those seventeen failures $150 was a reasonable settlement figure per pipe failure. He denied, however, that it would be a reasonable figure for all other failures. On the question of how many pipe failures occurred as a result of the faulty pipe, defendant testified that there were eighty. The testimony of the field engineer employed by the city and that of other testifying was that a lesser number of failures occurred.

We must sustain the verdict and judgment of the lower court if there is substantial evidence from which reasonable men could have found for defendant in the amount in question. Meyer v. Ricklick, 99 Ariz. 355, 409 P.2d 280 (1965); Nalbandian v. Byron Jackson Pumps, Inc., 97 Ariz. 280, 399 P.2d 681 (1965); Spain v. Griffith, 42 Ariz. 304, 25 P.2d 551 (1933). Though the combined total of damages claimed by defendant exceeded the amount awarded, the jury could very well have limited their verdict by doing either of the following: (1) accepted certain items of damages and rejected others, or (2) found that a certain number of pipe failures actually occurred and for each failure allowed so much in damages. We cannot say that there is no possible combination of testimony upon which the verdict could have been based, nor is there anything of sufficient moment in the record suggesting that the verdict was the result of some extrinsic consideration such as bias, passion, prejudice or misconduct on the part of the jury.

Plaintiff's remaining assignments of error involve the giving or the refusal by the trial judge of certain requested instructions. Error is assigned because the trial court read section 44--249, 14 A.R.S. ¹ rather than plaintiff's Requested Instruction No. 4 charging the jury that a buyer claiming a breach of warranty must give the seller notice within a reasonable time. We have held that the giving of notice of a breach of warranty within a reasonable time after the buyer knows or should have known of the breach is a prerequisite to the right of recovery, Davidson v. Wee, 93 Ariz. 191, 379 P.2d 744 (1963), but we fail to see in the instant case how the jury was improperly charged on this point. The charge as it was actually given substantially covered the refused instruction. See Johnson v. Orcutt, 92 Ariz. 295, 376 P.2d 557 (1962).

Plaintiff next complains that the court erred in refusing to instruct the jury...