W. R. Weaver Co. v. Burroughs Corp.
| Decision Date | 28 March 1979 |
| Docket Number | No. 6759,6759 |
| Citation | 580 S.W.2d 76 |
| Parties | 27 UCC Rep.Serv. 64 W. R. WEAVER COMPANY, Appellant, v. BURROUGHS CORPORATION, Appellee. |
| Court | Texas Court of Appeals |
Ratliff, Haynes & Stading, Jack Ratliff, Robert A. Skipworth, El Paso, for appellant.
Studdard, Melby, Schwartz, Crowson & Parrish, Don Studdard, Harold E. Crowson, Jr., El Paso, for appellee.
This is an appeal from a summary judgment awarded to the Defendant. The Plaintiff, W. R. Weaver Company, leased accounting equipment and purchased the accompanying programs from the Defendant, Burroughs Corporation, and, becoming dissatisfied with the performance of the equipment and the programs, sued for alleged consequential damages suffered on theories of breach of express and implied warranties and on strict liability. Presented on this appeal are questions as to whether the statute of limitations barred the claim and whether certain exclusionary clauses as to warranties and consequential damages contained in the contracts relieved the Burroughs Corporation of any liability for warranties or for the consequential damages. We will reverse and remand.
This summary judgment was rendered before Rule 166-A, Tex.R.Civ.P., was amended on January 1, 1978. The summary judgment proof shows that the Defendant, Burroughs Corporation, leased an L7000 computer to the Plaintiff, W. R. Weaver Company, by lease agreement dated November 1, 1971, the machine being designed to perform certain accounting procedures. At the same time, Burroughs, by a separate contract in writing which was dated November 2, 1971, agreed to provide and to sell to Weaver the programs or software which would be used in the machine to perform Weaver's automated sales accounting, finished goods inventory control, payroll and related reports, accounts receivable with aging, and accounts payable. All of the programs with the exception of the last had as their anticipated delivery schedule the date that the L7000 machine was delivered to Weaver. As to the accounts payable program, the anticipated delivery schedule was 180 days after delivery of the machine.
Among the terms and conditions of the contract regarding the sale of the software was the following provision: "Burroughs believes the programming being furnished hereunder is accurate and reliable and when programming accomplishes initially agreed-upon results, such programming will be considered completed."
Because Weaver insisted that some assurance regarding the system be given, Burroughs, in addition to the lease agreement and the sales contract, executed
and delivered to Weaver the following document: STATEMENT OF
INSTALLATION CONDITIONS BURROUGHS L7000 ACCOUNTING
Burroughs Corporation will, as provided in the cost of software programming, include the services of our district systems analyst to completely define your accounting needs and design a working system to meet your specific requirements. You will also receive the complete support of our local force in training your staff, both prior to and after completion of the installation.
Burroughs Corporation further agrees that software, as listed in addendum for application software support, will be operable prior to installation.
The L7000 was delivered to Weaver in February, 1972 and, according to the summary judgment proof offered by the non-moving Plaintiff, Weaver started using the equipment with the payroll program. According to the affidavit of Ron Colwell, a former employee of Burroughs, the system was slow in starting up, and by August, 1972, the only operational program that was then functioning was still the payroll program. About October, 1972, this employee and Mr. Hicks, the Accounting Manager for Weaver, started to operate the automatic sales accounting program, but it was not until 1973 that that program was actually able to be operated by the regular accounting employees of Weaver. Because the other programs had not been implemented, neither Colwell nor Hicks knew of any problems that Weaver would encounter from the other programs until they were actually put in use by the operators in 1973. Colwell remembered that Burroughs was always on his back to get something done about the machines so that Weaver would pay for them.
According to two of Weaver's clerks who operated the machine, it was not until 1973 that the account receivables program was delivered and put into operation, and as to that operation the agency function never worked properly; that the finished goods inventory control program was slow and cumbersome and did not work properly; the automatic sales accounting program was slow and caused overtime; and the accounts payable program was never received from Burroughs.
As previously pointed out, the original agreement was that all accounting programs, with the exception of the accounts payable, would be operable at the time of installation; that through all of 1972, only the payroll program was in normal operation. On April 11, 1972, the Accounting Manager for Weaver notified Burroughs that Weaver would refuse to make payments because of lack of delivery, and thereafter Weaver made no payments on the contracts until the end of 1972. At that time, the parties apparently attempted to arrive at a solution to the difficulties that had arisen, though the exact dates and the exact nature of the agreements made between them are not entirely clear from the proof, and as later pointed out all this matter can be considered as being partially in dispute. At that time, Burroughs contacted Weaver and, as a result, Burroughs sold the L7000 to Funding Systems Leasing pursuant to a purchase order dated December 10, 1972, and Weaver in turn entered into a lease with Funding Systems and started making lease payments to that organization. Its first check to that organization was dated December 8, 1972. During that period, Burroughs cancelled all lease rentals owed by Weaver from the time of the delivery of the equipment up until the end of 1972.
Sometime later, Weaver discontinued the use of the equipment and the programs, and filed the present suit on December 21, 1976, alleging therein a breach of an express warranty and implied warranties of fitness and merchantability, claiming also a recovery on the theory of strict liability because of defective design. The damages alleged are those of an incidental and consequential nature, it being finally claimed that the Plaintiff was entitled to treble its recovery and to reasonable attorney's fees by virtue of the Texas Deceptive Trade Practices Consumer Protection Act, Article 17.50, Tex.Bus. & Comm.Code Ann. (Supp.1978-1979). The Defendant answered pleading, among other things, the statute of limitations, express waivers of all implied warranties, as well as waivers and exclusions of the claimed damages. Thereafter, Burroughs filed its motion for summary judgment setting forth six separate grounds, and the trial Court, in granting the motion, stated that the judgment was granted upon each and every ground made in the motion for summary judgment.
The sole point presented on appeal is the general one that the trial Court erred in granting the motion for summary judgment. Under the point, each of the grounds urged by Burroughs and sustained by the Court below are attacked and covered. The question on appeal, as well as in the trial Court, is whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the Plaintiff's cause of action. We note further that, since the judgment was entered previous to 1978 under the rule then in force opinion testimony would not support a summary judgment. Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.1970).
The first two grounds in the motion for summary judgment were that the four-year statute of limitations barred both the claim on the lease of the L7000 computer and any claim on the sale of the software. Burroughs separated the two transactions, and on the equipment lease agreement argued that the four-year statute of limitations, Article 5527, Tex.Rev.Civ.Stat.Ann. (1958), controls, and it began to run from the date the contract was breached. It argues that the summary judgment proof established...
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