Willman v. Ewen, 51478

• Decision Date: 23 October 1981
• Docket Number: No. 51478,51478
• Citation: 230 Kan. 262,634 P.2d 1061
• Parties: , 32 UCC Rep.Serv. 739 Paula WILLMAN, Plaintiff-Appellant, v. Dale EWEN and Richard Ewen, d/b/a Ewen Motor Company, Defendants-Appellees.
• Court: Kansas Supreme Court

Page 1061

634 P.2d 1061

230 Kan. 262, 32 UCC Rep.Serv. 739

Paula WILLMAN, Plaintiff-Appellant, v. Dale EWEN and Richard Ewen, d/b/a Ewen Motor Company Defendants-Appellees.

No. 51478.

Supreme Court of Kansas.

Oct. 23, 1981.

Syllabus by the Court

1. K.S.A. 50-623 requires the Kansas Consumer Protection Act to be liberally construed to protect consumers from suppliers who commit deceptive and unconscionable practices.

2. Under K.S.A. 50-627, the Kansas Consumer Protection Act is not limited to conduct existing at the time the contract was made. The act embraces unconscionable acts or practices occurring "before, during or after" the transaction.

3. A car dealer may commit a deceptive or unconscionable practice under the Kansas Consumer Protection Act when, without a valid excuse, he delays over three months to notify a purchaser that her order for a limited production car cannot be filled and, with knowledge that the manufacturer cannot furnish the car, advises the purchaser that the car will be furnished in due course.

Bryson R. Cloon, of Cloon & Bennett, Overland Park, argued the cause and was on the brief for plaintiff-appellant.

Ronald P. Wood, Erie, argued the cause, and Charles F. Forsyth, Erie, was with him on the brief for defendants-appellees.

PRAGER, Justice:

This case is before the Supreme Court following the granting of a petition for review of the decision of the Court of Appeals in Willman v. Ewen, 6 Kan.App.2d 321, 627 P.2d 1190 (1981). This is an action brought by the plaintiff-appellant, Paula Willman, to recover damages from the defendants-appellees, automobile dealers doing business as Ewen Motor Company, following the defendants' failure to deliver a 1978 Chevrolet Corvette Indianapolis 500 Pace Car. The district court granted summary judgment to the defendants based on the pleadings and the discovery depositions of the parties.

For purposes of this appeal, we will construe the evidence in the depositions against the defendants in determining whether or not summary judgment was properly granted to the defendants. We will assume the following facts to be true: On February 1, 1978, plaintiff, Paula Willman, a resident of Kansas City, telephoned Larry Miller, a family acquaintance and car dealer in Chanute, Kansas. Plaintiff wanted to buy a special edition 1978 Chevrolet which had been designated as the 1978 Indianapolis pace car. She wanted the car as a personal investment, either to drive, warehouse, or sell. Larry Miller told plaintiff that his pace car had been sold, but he thought Ewen Motor Company in Erie, Kansas, had such a car. Miller called Rich Ewen who operated Ewen Motor Company with his father, Dale, and a brother, Randy. Ewen told Miller that he did not know if the car had been sold, but that, if it was not sold, plaintiff could buy it. They agreed it would be sold at the list price of approximately $13,800. A written purchase order was made out by Ewen Motor Company to Paula Willman. It described the car in detail, set the price, and listed a $1,000 down payment. It established the approximate date of delivery as May 1978. Larry Miller forwarded one copy of the purchase order to plaintiff, and plaintiff mailed to Miller a personal check for the down payment to Ewen Motor Company in the sum of $1,000. The check was dated February 1, 1978, and was received by Ewen Motor Company on February 3 or 4. The purchase order contained the following provision at the top of the first page:

"Delivery is to be made Approx. May, 1978, as soon thereafter as possible. It is agreed, however, that neither you nor the Manufacturer will be liable for failure to effect delivery." (Emphasis supplied.)

The day following the conversation between Rich Ewen and Larry Miller, Rich Ewen was advised by his father, Dale Ewen, that the pace car allocated to their dealership had already been sold to another customer. Their depositions indicate that both Rich Ewen and Dale Ewen knew that only one pace car had been allocated by General Motors to each dealer, but they hoped to obtain a car from another dealer in order to fulfill their sales contract with the plaintiff. The defendants never ordered another car from General Motors, having made the decision not to do so in February of 1978. The Ewens called several dealers in surrounding cities, attempting to locate another pace car but could not find one at a price to meet the quoted price contained in the plaintiff's purchase order. Pace cars were available only for $18,000 or more.

In March of 1978, plaintiff's brother was in Erie, Kansas, and stopped by Ewen Motor Company to inquire about plaintiff's car. Rich Ewen advised plaintiff's brother that her car would be delivered and gave him the dealer order number on the car and the date when the car would be released from the factory for delivery to plaintiff. In April, the plaintiff telephoned Ewen Motor Company to ascertain when her car would be available. Rich Ewen advised plaintiff that the car was coming and he was expecting it in at any time. He advised her that he wanted to delay delivery of her car, because the company wanted to put it on promotional display through Memorial Day weekend. Rich Ewen also advised plaintiff that they wanted her to title her car in Neosho County, in order for the dealership to get proper credit from General Motors.

It appears from the discovery depositions that neither Rich Ewen or Dale Ewen or any other employee of the company during the period between February 1 and May 9, 1978, advised the plaintiff that the original pace car allocated to them had been sold to another customer and that the company was trying to locate another car for her from other dealers in the area. On the contrary, the defendants made affirmative statements to the plaintiff that the pace car would be delivered by the manufacturer early in May. In May of 1978, the defendants sent the plaintiff a letter advising her that she would not receive a car and enclosing the company's check dated May 9, 1978, in the amount of the original down payment. On August 2, 1978, plaintiff sued the Ewen Motor Company for damages, alleging breach of contract, violation of the Kansas Consumer Protection Act (K.S.A. 50-623 et seq.) and fraud. After the defendants filed a responsive pleading, the parties presented to the trial court a joint motion to determine two issues of law before trial: (1) In view of the contract provision, was Ewen bound to deliver the automobile so as to be liable in damages for nondelivery? and (2) Do plaintiff's three causes of action in her petition state facts sufficient to constitute a valid cause of action?

The joint motion contained basic stipulations and, in substance, moved the court to determine the legal issues based on the pleadings and discovery depositions. Briefs were submitted and the district court then granted summary judgment in favor of the defendants. The basis for summary judgment was the contract provision that neither Ewen nor the manufacturer would be liable for failure to effect delivery of the automobile. The trial court found nothing unconscionable in the contract provision which would make it unenforceable under the Uniform Commercial Code (K.S.A. 84-2-302). The court concluded that the basic theory of plaintiff's three causes of action was that the car was not delivered to her and, if the clause in the contract was valid, there could be no liability under any of plaintiff's theories.

Plaintiff appealed to the Court of Appeals which held, in substance, that plaintiff had no cause of action on the theory of a breach of contract, because, at the time the contract was entered into, the contract provision relieving the defendants from liability for nondelivery was not unconscionable. The Court of Appeals concluded, however, that the district court erred in granting summary judgment against the plaintiff's second cause of action which was based on a deceptive or unconscionable practice under the Kansas Consumer Protection Act. The case was reversed and remanded to the district court for trial on the factual issues raised by the parties. The Supreme Court granted review on the petition of the defendants.

We will first consider whether the contract provision relieving Ewen Motor Company and the manufacturer from liability for nondelivery was a valid and enforceable provision when the contract was entered into. We agree with the trial court and the Court of Appeals that the contractual provision in question is not unconscionable and was valid and enforceable at that time. We have held on a number of occasions that restrictions on liability in sales contracts will be enforced if they are reasonable and are voluntarily agreed to by the parties to the contract. Wille v. Southwestern Bell Tel. Co., 219 Kan. 755, 549 P.2d 903 (1976); Kansas City Structural Steel Co. v. L.G. Barcus & Sons, Inc., 217 Kan. 88, 535 P.2d 419 (1975); Merchantile Co. v. Canning Co., 111 Kan. 68, 206 P. 337 (1922); Case v. Mickley, 72 Kan. 372, 83 P. 970 (1905).

In Wille, it is pointed out that American courts have traditionally taken the view that competent adults may make contracts on their own terms, provided they are neither illegal nor contrary to public policy, and that in the absence of fraud, mistake, or duress a party who has fairly and voluntarily entered into such a contract is bound thereby, notwithstanding it was unwise or disadvantageous to him. Gradually, however, this principle of freedom of contract has been qualified by the courts as they were confronted by contracts so one-sided that no fair-minded person would view them as just or tolerable. The doctrine of unconscionability received its greatest impetus when it was enacted as a part of the Uniform Commercial Code (K.S.A. 84-2-302) which provides in part as follows:

"(1) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may...