Warner v. Reagan Buick, Inc.

• Decision Date: 15 May 1992
• Docket Number: No. S-89-1189,S-89-1189
• Citation: Warner v. Reagan Buick, Inc., 483 N.W.2d 764, 240 Neb. 668 (Neb. 1992)
• Court: Nebraska Supreme Court
• Parties: , 17 UCC Rep.Serv.2d 746 George W. WARNER III and Virginia C. Warner, Appellees and Cross-Appellees, v. REAGAN BUICK, INC., Defendant and Third-Party Plaintiff, Appellee and Cross-Appellant, and Superior Buick Pontiac GMC, Inc., now known as Rhoden Motor Center, Third-Party Defendant, Appellant and Cross-Appellee.

Page 764

483 N.W.2d 764

240 Neb. 668, 17 UCC Rep.Serv.2d 746

George W. WARNER III and Virginia C. Warner, Appellees and Cross-Appellees, v.REAGAN BUICK, INC., Defendant and Third-Party Plaintiff, Appellee and Cross-Appellant andSuperior Buick Pontiac GMC, Inc., now known as Rhoden Motor Center, Third-Party Defendant, Appellant and Cross-Appellee.

No. S-89-1189.

Supreme Court of Nebraska.

May 15, 1992.

Syllabus by the Court

1.Judgments: Appeal and Error.On appeal from a bench trial of a law action, the trial court's factual findings have the effect of a jury verdict and will not be set aside unless clearly erroneous, but as to questions of law, we arrive at an independent conclusion.

2.Uniform Commercial Code: Breach of Warranty: Value of Goods: Damages.The measure of damages for breach of an express warranty is the difference between the value of the goods at the time of acceptance and their value as warranted.

3.Uniform Commercial Code: Sales: Revocation: Breach of Warranty: Actions.The right to revoke acceptance, cancel the contract, and recover any amounts paid is a separate, independent, and alternative cause of action from one for breach of warranty with regard to accepted goods.

4.Revocation: Breach of Warranty: Actions.Revocation of acceptance is not a prerequisite to a suit for breach of warranty.

5.Actions: Pleadings.It is the essential character of a cause of action as shown by the allegations of the complaint, and not the pleader's denomination, which determines the nature of an action.

6.Equity: Damages.The right to indemnity is generally regarded as equitable in nature.

7.Uniform Commercial Code: Damages.The general law of indemnity supplements the provisions of the Uniform Commercial Code.

8.Contracts: Notice: Tender: Damages.Notice of suit or tender of defense is not ordinarily a condition precedent to recovery on an indemnity contract, even as to a liability incurred or determined in a prior action against the indemnitee.

9.Negligence: Liability: Damages.Indemnification is available when one party is compelled to pay money which in justice another ought to pay, or has agreed to pay, unless the party making the payment is barred by the wrongful nature of his conduct.

10.Liability: Contribution: Damages.Indemnification is distinguishable from contribution in that the latter involves a sharing of the loss between parties jointly liable.

11.Liability: Contribution: Damages.Generally, the party seeking indemnification must have been free of any wrongdoing, and its liability is vicariously imposed.

12.Negligence: Damages.Indemnity is available to one who engaged in merely passive neglect, but unavailable to one who engaged in direct and active negligence.

13.Liability: Contribution: Damages.If a party seeking indemnification is independently liable to the plaintiff, that party is limited to a claim for contribution.

14.Judgments: Records.When there is a conflict between the record of a judgment and a verbatim record of the proceedings in open court, the latter prevails.

Victor J. Lich, Jr. of Lich, Herold & Mackiewicz, Omaha, for appellant.

Joseph F. Daly and P. Shawn McCann of Sodoro, Daly & Sodoro, Omaha, for appelleeReagan Buick.

Michael F. Pistillo of Steier & Kreikemeier, P.C., Omaha, for appellees Warner.

HASTINGS, C.J., and BOSLAUGH, WHITE, CAPORALE, SHANAHAN, GRANT, and FAHRNBRUCH, JJ.

WHITE, Justice.

This is an action by the purchasers of a used automobile, George W. Warner III and Virginia C. Warner(the Warners), to recover damages from the dealer-seller, Reagan Buick, Inc.(Reagan), for breach of contract, breach of express and implied warranties, and violation of the Nebraska Uniform Deceptive Trade Practices Act.Reagan filed a third-party action against the seller from which it had purchased the automobile, Superior Buick Pontiac GMC, Inc.(Superior), in which Reagan alleged that any damages which the Warners might recover against Reagan should be imposed against Superior in favor of Reagan.

The trial court rendered judgment in favor of the Warners, against Reagan, in the amount of $7,734 and in favor of Reagan on its third-party complaint against Superior in the amount of $3,867, or one-half the amount awarded the Warners.In addition, Reagan and Superior were each assessed an attorney fee of $1,000 in favor of the Warners.Superior appeals and Reagan cross-appeals.

Superior's assignments of error are summarized as follows: The trial court erred in (1) finding that Superior breached its contract with Reagan; (2) finding that Superior breached any express or implied warranties in its sale of the automobile to Reagan; (3) failing to find that Reagan waived its right to sue by not reasonably notifying Superior of the breach or revoking its acceptance within a reasonable time, as required by Neb. U.C.C. §§ 2-607and2-608(Reissue 1980);(4) failing to sustain Superior's motion for summary judgment; and (5) failing to sustain Superior's motions to dismiss Reagan's third-party petition at the close of the Warners' case and at the conclusion of all the evidence.

Reagan, which is considered an appellee and a cross-appellant by virtue of Neb.Ct.R. of Prac. 1C(rev. 1989), directs its appeal against both the Warners and Superior.Against the Warners, Reagan asserts that the trial court erred in (1) finding that Reagan breached its contract with the Warners and that Reagan breached any express or implied warranties and (2) failing to sustain its motions to dismiss the Warners' petition at the close of the Warners' case and at the close of all the evidence.Against Superior, Reagan assigns as error the trial court's entry of judgment for only one-half of the damages assessed against Reagan in favor of the Warners.

We shall first discuss the errors assigned by Reagan in its cross-appeal against the Warners.When viewed most favorably to the prevailing party, the Warners, the facts material to the resolution of the case are as follows:

In early February 1986, the Warners began negotiating with a representative of Reagan to purchase the vehicle in question.Reagan's salesman represented that the automobile was a "one-owner" vehicle acquired through a trade-in.On February 5, the Warners executed a sales contract describing the vehicle as a 1983 Buick Riviera.The negotiated price was $12,647.17 and, including interest, credit life insurance, and a maintenance agreement, the total acquisition cost was $17,120.97.A paper prominently displayed in the window announced that the car was sold "as is," without any express or implied warranties.

Shortly after the Warners took possession of the car, several problems developed.The windows did not operate properly, and when they did operate, they caused the interior lights to go on.Also, the transmission did not function properly, and the vehicle leaked when left in the rain.Sometime in late March or early April 1986, the Warners requested that Reagan take the car back, but Reagan refused to do so.The Warners thereafter remained in possession of the vehicle, driving it daily up through the time of trial and, in the process, adding approximately 15,000 miles to the 26,761 miles already on the odometer at the time the Warners purchased the vehicle.

The Warners were not initially furnished with a title because it was held by General Motors Acceptance Corporation, the company which had financed the purchase.Upon investigating the vehicle's history, the Warners discovered that the car was originally sold by a dealer to a Michael Stevens of Illinois.The car was stolen from Stevens and subsequently stripped and burned.Stevens' insurer sold the burned-out frame to an auto parts store in Illinois, which rebuilt the automobile and sold it to Mitchell Used Cars of Greentop, Missouri.Mitchell in turn sold it to Martz Auto in Ottumwa, Iowa.Martz Auto apparently sold the car at auction to Superior.Superior then sold it to Reagan, who finally sold it to the Warners.

Several automobile appraisers, testifying as experts, stated that the car contained Buick Riviera parts from various model years between 1978 and 1983 and possibly parts from other makes of cars as well.There was also testimony that the paint was thick in spots, indicating that the vehicle had been repainted.All the experts agreed that it would be evident to anyone experienced in the automobile business that the car was a 1983 Buick in name only.Each expert also testified that the value of the car was substantially lessened because of the amalgamation of parts used and the lack of skill evident in the attempted restoration.In this regard, they specifically noted that bundles of wires were not attached to anything and that the 1979 instrument panel installed lacked a turbo indicator, even though the 1983 model contained a turbo engine.

For its first assignment of error, Reagan argues that the evidence is insufficient as a matter of law to support a finding that Reagan breached its contract or any express or implied warranties.In our review of Reagan's cross-appeal against the Warners, we are governed by the rule that in a bench trial of a law action, a trial court's factual findings have the effect of a jury verdict and will not be set aside unless clearly erroneous, but as to questions of law, we arrive at an independent conclusion.Nebraska Builders Prod. Co. v. Industrial Erectors, 239 Neb. 744, 478 N.W.2d 257(1992).

Neb.U.C.C. § 2-313(Reissue 1980) provides:

(1) Express warranties by the seller are created as follows:

(a) Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.

(b) Any description of the goods which is made part of the basis of the bargain creates an express warranty that the goods shall conform to the description.

(c) Any...