Barko Hydraulics, LLC v. Michael Shepherd , 167 So. 3d 304 ( 2014 )

Rel: 09/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
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SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
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1121479
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Barko Hydraulics, LLC
v.
Michael Shepherd
Appeal from Bullock Circuit Court
(CV-11-900010)
PER CURIAM.
Following a two-day trial in May 2013, a Bullock County
jury returned a $450,000 verdict in favor of Michael Shepherd
on a breach-of-warranty claim he asserted against Barko
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Hydraulics, LLC ("Barko"). Barko appeals the judgment entered
on that verdict. We reverse and remand.
I. Facts and Procedural History
On September 12, 2008, Shepherd purchased a Barko 495ML
knuckle boom loader ("the 495ML loader") from G&S Equipment
Company in Prattville for use in his logging operation.1 The
price of the 495ML loader was $202,274, and Shepherd financed
the purchase through Wells Fargo, agreeing to make 60 monthly
payments of $4,039. In conjunction with Shepherd's purchase
of the 495ML loader, Barko issued a warranty. That warranty
provided, in part:
"Barko Hydraulics, LLC ('Barko'), warrants to
the distributor and/or original Buyer each new
hydraulic knuckle boom loader ... including
attachments and accessories thereto. ('Product')
sold by Barko is to be free from defects in material
and workmanship under normal use, maintenance and
service.
"Barko will cause any major structural component
of a Barko product covered by this warranty which
proves to be defective in material or workmanship
under normal use, maintenance and service within
three (3) years or 6,000 hours, whichever occurs
first from first day in service ..., to be replaced
1
As described in the record, the 495ML loader was used to
pick up trees and load them onto a truck after the trees were
felled by a "cutter" such as a "feller buncher" and then
dragged to the loading area by a "skidder."
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without charge with a new or repaired part, at
Barko['s] election. Barko also will cause the labor
to remove any such defective part and to install the
new or repaired part to be provided without charge
to the owner of said Barko product. The parts and
labor to meet this warranty will be furnished by
designated Barko distributor.
"Barko will cause all other parts of product
covered by this warranty which proves to be
defective in material or workmanship under normal
use, maintenance and service within one (1) year or
2,000 hours, whichever occurs first from first day
in service ..., to be replaced, without charge, with
a new or repaired part, at Barko['s] election.
Barko also will cause the labor to remove any such
defective part and to install the new or repaired
part to be provided without charge to the owner of
said Barko product. The parts and labor to meet
this warranty will be furnished by designated Barko
distributor."
The warranty excluded coverage for "[d]amage due to failure to
maintain or use the Barko product or part according to
manuals, schedules, or good practice." The warranty limited
Barko's potential liability under the warranty as follows:
"Remedies available to any person claiming under
this warranty are exclusive and expressly limited to
obtaining the parts and the labor, where applicable,
in accordance with terms of this warranty.
"Barko['s] liability for losses, damages, or
expenses of any kind arising from the design,
manufacture or sale of the product covered by this
warranty, whether based on warranty, negligence,
contract, tort or otherwise, is limited to an amount
not exceeding the cost of correcting the defects as
herein provided, and, at the expiration of the
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applicable warranty period, all such liability shall
terminate.
"Barko shall in no event be liable for
incidental, consequential, or special damages [for]
losses of use of the Barko product, a loss or damage
to property other than the Barko product, a loss of
profits or other commercial loss, or any special or
consequential damages (except liability for
consequential damages which by law may not be
disclaimed)."
Finally, the warranty stated that it was issued "in lieu of
all other warranties express or implied, statutory, written or
oral" and that there was "no implied warranty of
merchantability or fitness for a particular purpose."
Shepherd signed a receipt indicating that he understood the
warranty and the maintenance requirements of the 495ML loader.
Shepherd testified that he was initially pleased with the
performance of the 495ML loader after incorporating it into
his logging operation. Shepherd testified, however, that
after approximately four months of use the 495ML loader began
having problems with its hydraulic system and with fuel
consumption. Shepherd testified at trial that he informed G&S
Equipment about these problems with the 495ML loader numerous
times. G&S Equipment's owner, Mike Guy, testified that G&S
Equipment was not notified of all of these problems. On
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behalf of Barko, G&S Equipment serviced the 495ML loader
several times during Shepherd's first year of ownership,
replacing the alternator, a turntable bearing, an air-heater
contact switch twice, all under the warranty and without cost
to Shepherd. Guy testified at trial that these were fairly
minor repairs and that they were unrelated to the hydraulic
system.
In August 2009, Shepherd brought the 495ML loader to G&S
Equipment for it to complete some outstanding warranty
repairs. At the time, the 495ML loader's clock was at
approximately 1900 hours; thus, only 1 month or 100 hours
remained before the warranty expired. G&S Equipment replaced
the swivel, replaced the solenoids, and repaired the joysticks
used by the operator to control the equipment on the loader.
Guy testified at trial that those repairs were both common and
relatively minor. Guy also testified, however, that during
the course of making those repairs, his shop noticed that
Shepherd's maintenance of the 495ML loader was lacking ––
specifically moving parts were not being greased and both
hydraulic filters and air filters were not being changed in
accordance with the manufacturer's recommended schedule. Both
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Shepherd and his employee, George Oliver, however, disputed
the idea that the 495ML loader was not being properly
maintained, testifying that they regularly maintained it in a
fashion similar to every other piece of logging equipment
they had used in their many years -- approximately 20 and 30
years, respectively -- of working in the logging industry.
Shepherd also emphasized that G&S Equipment's written service
records do not indicate that the 495ML loader was not being
properly maintained.
In November 2010, when the 495ML loader had approximately
4,300 hours on its clock, Shepherd transported it to G&S
Equipment for repairs after the hydraulic pumps began making
noise. G&S Equipment confirmed that the hydraulic pumps had
failed and notified Shepherd that the needed repairs, costing
approximately $10,000, would not be covered under the warranty
because the warranty period had expired. At Shepherd's
request, G&S Equipment contacted Barko, which confirmed that
it would not authorize or reimburse G&S Equipment for making
the needed repair because of the expiration of the warranty.
At that point, Shepherd told G&S Equipment that he could not
afford to pay for the repairs to the 495ML loader, nor could
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he continue to meet his obligation to Wells Fargo. He
therefore left the 495ML loader with G&S Equipment and
apprised Wells Fargo of its location and of his intention to
make no further payments on it. Wells Fargo subsequently
repossessed the 495ML loader, sold it, and obtained a $124,184
deficit judgment against Shepherd.
On January 28, 2011, Shepherd sued Barko, G&S Equipment,
and Cummins Mid-South, LLC, the manufacturer of certain
component parts of the 495ML loader, asserting fraud,
negligence and/or wantonness, and multiple breach-of-warranty
claims. Shepherd sought both compensatory damages for lost
profits and mental anguish and punitive damages. Ultimately,
G&S Equipment and Cummins Mid-South were dismissed from the
action, and, during the course of the trial, all of Shepherd's
claims against Barko except a breach-of-express-warranty claim
were withdrawn or dismissed. On May 2, 2013, the breach-of-
express-warranty claim was submitted to the jury following a
two-day trial and, after the jury returned a $450,000 verdict
in favor of Shepherd and against Barko, the trial court
entered a judgment consistent with the verdict. Barko's
subsequent postjudgment motion renewing its previous motion
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for a judgment as a matter of law or, in the alternative, for
a new trial was denied by the trial court on August 29, 2013;
on September 23, 2013, Barko filed its notice of appeal to
this Court.
II. Standard of Review
On appeal, Barko argues that the trial court erred by
denying Barko's motion for a judgment as a matter of law on
Shepherd's breach-of-express-warranty claim and by allowing
the jury to award damages for mental anguish and compensatory
damages exceeding the amount it would have cost to repair the
495ML loader. We review Barko's first argument concerning its
motion for judgment as a matter of law in accordance with the
following standard of review:
"When reviewing a ruling on a motion for a
[judgment as a matter of law], this Court uses the
same standard the trial court used initially in
deciding whether to grant or deny the motion for a
[judgment as a matter of law]. Palm Harbor Homes,
Inc. v. Crawford, 689 So. 2d 3 (Ala. 1997).
Regarding questions of fact, the ultimate question
is whether the nonmovant has presented sufficient
evidence to allow the case to be submitted to the
jury for a factual resolution. Carter v. Henderson,
598 So. 2d 1350 (Ala. 1992). The nonmovant must
have presented substantial evidence in order to
withstand a motion for a [judgment as a matter of
law]. See § 12-21-12, Ala. Code 1975; West v.
Founders Life Assurance Co. of Florida, 547 So. 2d
870, 871 (Ala. 1989). A reviewing court must
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determine whether the party who bears the burden of
proof has produced substantial evidence creating a
factual dispute requiring resolution by the jury.
Carter, 598 So. 2d at 1353. In reviewing a ruling
on a motion for a [judgment as a matter of law],
this Court views the evidence in the light most
favorable to the nonmovant and entertains such
reasonable inferences as the jury would have been
free to draw. Id."
Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875
So. 2d 1143, 1152 (Ala. 2003).
As to Barko's second argument regarding damages,
generally, the assessment of damages is within the sole
province of the jury. This Court will not substitute its
judgment for that of the jury and will not disturb a damages
award unless the award is the product of bias, prejudice,
improper motive or influence or was reached under a mistake of
law or in disregard of the facts. See, e.g., Daniels v. East
Alabama Paving, Inc., 740 So. 2d 1033, 1050 (Ala. 1999).
III. Analysis
A. Breach of Express Warranty
Barko argues that Shepherd's breach-of-express-warranty
claim should never have been submitted to the jury because, it
says, Shepherd failed to adduce substantial evidence
indicating that the hydraulic pumps stopped working on the
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495ML loader because of a defect. More particularly, Barko
contends that, to support a breach-of-express-warranty claim,
a plaintiff must present expert testimony detailing the defect
that caused the product to fail. Alternatively, Barko argues
that there was substantial evidence showing that Shepherd had
not maintained the 495ML loader in accordance with the
factory-suggested schedule. Barko also argues that the
warranty period had expired when the hydraulic pumps failed.
Shepherd counters that he presented substantial evidence
showing that Barko had breached the express warranty.
Specifically, Shepherd says that he presented substantial
evidence showing that the 495ML loader did not preform as
warranted, especially when Barko was given notice of the
problems with the 495ML loader but was unable, or unwilling,
to correct those problems. Shepherd contends that the
evidence as to whether inadequate maintenance caused the 495ML
to fail was disputed and that, therefore, the issue whether
improper maintenance of the 495ML loader precludes any breach-
of-warranty claim was proper for determination by the jury.
Shepherd also contends that there is no merit to Barko's
argument that the warranty period had expired when the pumps
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failed because Shepherd had repeatedly reported problems with
the 495ML loader and Barko did not, or could not, repair those
problems.
"Express warranties should be treated like any other type
of contract and interpreted according to general contract
principles." See Ex parte Miller, 693 So. 2d 1372, 1376 (Ala.
1997) (citing 2 Alphonse M. Squillante & John R. Fonseca,
Williston on Sales § 15–9 (4th ed. 1974)). "In Alabama, the
crux of all express warranty claims is that the goods did not
conform to the warranty." Ex parte Miller, 693 So. 2d at
1376. Barko warranted the 495ML loader to be free from
defects "in material or workmanship under normal use,
maintenance and service."
Barko asserts that Shepherd failed to prove that there
was any defect in the 495ML loader. The argument Barko
advances is that, like the plaintiffs in actions based on the
theory of products liability, the plaintiff asserting a
breach-of-warranty claim must establish the presence of a
specific defect. We conclude that the identification of an
existing defect is not essential to recovery upon an express
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warranty. See Ex parte Miller, 693 So. 2d at 1376,2 Yarbrough
v. Sears, Roebuck & Co., 628 So. 2d 478, 483 (Ala. 1993), and
Shell v. Union Oil Co., 489 So. 2d 569, 571 (Ala. 1986).3 It
is sufficient if, as here, the evidence shows, either directly
or by permissible inference, that the 495ML loader was
defective in its performance or function or that it otherwise
failed to conform to the warranty.
In this case, the evidence showed that, after four months
of use, the 495ML loader began to overheat and to use
excessive fuel and hydraulic fluid. Ultimately, after the
495ML loader was serviced repeatedly, the hydraulic pumps
stopped working. "[W]e have held that the application of an
express warranty is a question of fact for the trier of fact.
Ex parte Miller, 693 So. 2d 1372 (Ala. 1997)." Vesta Fire
Ins. Corp. v. Milam & Co. Constr., Inc., 901 So. 2d 84, 104
(Ala. 2004). The parties submitted conflicting evidence.
2
Explaining that "'[c]are must be taken to avoid elevating
a defect in the goods to the status of an essential element
that must be shown in order to recover for a breach of an
express warranty.' Ronald A. Anderson, Anderson on the
Uniform Commercial Code, § 2–313:217 (3d ed. 1995))."
3
Yarbrough and Shell recognize the clear distinction in
proof between Alabama Extended Manufacturer's Liability
Doctrine law and Uniform Commercial Code law.
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Therefore, the trial court properly submitted this issue to
the jury for resolution.
In the alternative, Barko maintains that Shepherd's
improper maintenance of the 495ML loader precludes any breach-
of-warranty claim. We are not persuaded by Barko's argument
in that regard. The evidence was conflicting as to whether
Shepherd properly maintained the 495ML loader, and that issue
was likewise proper for jury resolution.
Guy, G&S Equipment's owner and Barko's Prattville
dealership representative, testified that his shop noticed
that Shepherd's maintenance of the 495ML loader was not in
accord with the manufacturer's specifications. Guy explained
that moving parts were not being greased and that both
hydraulic filters and air filters were not being changed in
accordance with the manufacturer's recommended schedule. Both
Shepherd and his employee, Oliver, however, disputed that the
495ML loader was not properly maintained. Shepherd and Oliver
both testified that they regularly maintained the 495ML loader
in a fashion similar to every other piece of logging equipment
they had used in their many years -- approximately 20 and 30
years, respectively -- of working in the logging industry.
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Shepherd emphasized that the written service records failed to
indicate that the 495ML loader was not being properly
maintained. Based on conflicting evidence, whether improper
maintenance resulted in the failure of the hydraulic pumps in
the 495ML loader and precluded any breach-of-warranty claim
was a matter for the jury to determine. See, e.g., Royal
Typewriter Co. v. Xerographic Supplies Corp., 719 F.2d 1092,
1103 (11th Cir. 1983) (providing that whether improper
maintenance precluded any breach-of-warranty claim was a
matter for the jury to determine).
Regarding Barko's contention that the warranty period had
already expired when the hydraulic pumps failed, we are
likewise not persuaded. Barko had an obligation under the
warranty. After four months of use, the 495ML loader began to
overheat and to use excessive fuel and hydraulic fluid. After
the 495ML loader was repeatedly serviced, the hydraulic pumps
stopped working. Barko failed to correct the problems with
the 495ML loader after repeated complaints and servicings.
Given the numerous attempts at repair over the extended
period, the jury could properly have concluded that the 495ML
loader had not been repaired and that the warranty had failed
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of its essential purpose.4 Barko breached its contract during
the warranty period. As is the case with any contract that is
breached, Shepherd's damages were precipitated by Barko's
failure to perform. Mere passage of time did not cure or
excuse that breach or failure to perform. Accordingly, the
trial court did not err in submitting the breach-of-express-
warranty claim to the jury.
B. Damages
Barko argues that Shepherd's recovery was limited to the
cost to repair of the 495ML loader. Barko also argues that
the trial court erred in instructing the jury on mental-
anguish damages. Shepherd says that, because the warranty
4
See, e.g., Massey-Ferguson, Inc. v. Laird, 432 So. 2d
1259, 1264 (Ala. 1983) (holding that "[g]iven the numerous
attempts at repair over the extended time period, the jury
could properly conclude (as it presumably did, since it
obviously awarded consequential damages) that the combine was
not repaired within a reasonable time and that the limited
warranty had failed of its essential purpose"); Courtesy Ford
Sales, Inc. v. Farrior, 53 Ala. App. 94, 298 So. 2d 26, 33
(Ala. Civ. App. 1974), superseded by rule on other grounds,
see Arnold v. Campbell, 398 So. 2d 301 (Ala. Civ. App. 1981)
(stating that, when a manufacturer limits its obligation to
the repair and replacement of defective parts and repeatedly
fails to correct the defect as promised within a reasonable
time, it is liable for the breach of that promise as a breach
of warranty); Tiger Motor Co. v. McMurtry, 284 Ala. 283, 290,
224 So. 2d 638, 644 (1969) (providing that a seller does not
have unlimited time to repair and/or to replace parts under a
warranty).
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failed of its essential purpose, he was entitled to an award
of damages as allowed by the Uniform Commercial Code (the
"UCC"), as well as damages for mental anguish. Shepherd
claims that Barko failed to preserve its claim that the trial
court erred in instructing the jury on mental-anguish
damages.5
The measure of damages for breach of warranty arising
from the sale of goods is governed by § 7-2-714 and § 7-2-715,
Ala. Code 1975. Section 7-2-714(2) provides, in part:
"(2) The measure of damages for breach of
warranty is the difference at the time and place of
acceptance between the value of the goods accepted
and the value they would have had if they had been
as warranted, unless special circumstances show
proximate damages of a different amount ...."
Section 7-2-715 provides for the recovery of incidental
and consequential damages in appropriate cases. It provides,
in part:
"(1) Incidental damages resulting from the
seller's breach include expenses reasonably incurred
in inspection, receipt, transportation and care and
custody of goods rightfully rejected, any
commercially reasonable charges, expenses or
commissions in connection with effecting cover and
5
Our review of the record indicates that Barko adequately
preserved the mental-anguish-instruction issue for appellate
review.
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any other reasonable expense incident to the delay
or other breach.
"(2) Consequential damages resulting from the
seller's breach include:
"(a) Any loss resulting from general
or particular requirements and needs of
which the seller at the time of contracting
had reason to know and which could not
reasonably be prevented by cover or
otherwise ...."
Generally, mental-anguish damages are not recoverable in
a breach-of-contract action. Bowers v. Wal–Mart Stores, Inc.,
827 So. 2d 63, 68-70 (Ala. 2001). This Court, however,
recognized in Bowers a limited mental-concern or solicitude
exception to the general rule. Id.
In this case, under the UCC, the jury could award the
difference between the actual value of the 495ML loader and
its value had it been as warranted and incidental or
consequential damages. However, mental-anguish damages are
not recoverable under the facts of this case. Shepherd
alleged that he lost his business because of the problems
with, and the failure of, the 495ML loader. Shepherd claimed
that the loss of his logging business caused his divorce,
resulting in his spending less time with his daughter. Here,
Barko's contractual duty to Shepherd was not "'so coupled with
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matters of mental concern or solicitude ... that a breach of
that duty will necessarily or reasonably result in mental
anguish or suffering ....'" F. Becker Asphaltum Roofing Co.
v. Murphy, 224 Ala. 655, 657, 141 So. 630, 631 (1932)(quoting
8 R.C.L. p 529, § 83).6 There must be some nexus between the
mental-anguish damages and the intention and contemplation of
the parties at the time the contract was made; there is not
substantial evidence to support the award of such damages
under the circumstances of this case.
In this case, the jury returned a general verdict.
Because general damages were awarded, there is no way to
determine the amount the jury attributed to each type of
damages, some of which were properly awardable, and some of
which were not. Accordingly, we reverse the judgment in its
entirety and remand the case for a new trial.
IV. Conclusion
We reverse the judgment entered against Barko, and we
remand the case for entry of an order granting Barko's motion
for a new trial.
6
See Bowers v. Wal–Mart Stores, Inc., 827 So. 2d 63, 68-70
(Ala. 2001), and its progeny for a discussion of cases in
which exceptions to the general rule have been upheld.
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REVERSED AND REMANDED WITH DIRECTIONS.
Moore, C.J., and Bolin and Main, JJ., concur.
Murdock, J., concurs specially.
Shaw, J., concurs in the result.
Parker and Bryan, JJ., concur in part and dissent in
part.
Stuart, J., concurs in the result in part and concurs in
part and dissents in part as to the rationale.
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MURDOCK, Justice (concurring specially).
I concur in the main opinion, as well as in Justice
Shaw's special writing regarding consequential and incidental
damages. For its part, the main opinion holds that it is not
necessary for a purchaser making a warranty claim under the
Uniform Commercial Code to present expert testimony or other
evidence to explain the specific defect giving rise to a
warranty claim and that "[i]t is sufficient if, as here, the
evidence shows, either directly or by permissible inference,
that the 495ML loader was defective in its performance or
function or that it otherwise failed to conform to the
warranty." ___ So. 3d at ___. I agree with this statement in
the context presented here, where the evidence of a failure is
coupled with evidence upon which a jury could find that the
purchaser properly maintained and used the product or that any
deficiency in the maintenance or use was not the cause of the
failure of the product. Were we to hold otherwise based on
Ex parte Miller, 693 So. 2d 1372, 1376 (Ala. 1997), as Barko
Hydraulics, LLC, urges, then it appears to me that we would
have to ignore the logical inference possible in a case in
which a jury is presented with substantial evidence showing no
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lack of proper maintenance or use of the product that could
have caused its failure and place too much weight on the
discussion by Miller as to cases that might involve warranties
against "defects in materials and workmanship," which Miller
did not.
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SHAW, Justice (concurring in the result).
I concur in the result reached by the main opinion. I
write specially to explain why the trial court did not err in
submitting to the jury the issue of incidental and
consequential damages.
Incidental and consequential damages can be recovered for
a seller's breach. Ala. Code 1975, §§ 7-2-714(3) and -715.
Under Ala. Code 1975, § 7-2-719(1), parties may agree to limit
remedies for breaches, including damages. However, §
7-2-719(2) states that "[w]here circumstances cause an
exclusive or limited remedy to fail of its essential purpose,
remedy may be had as provided in this title." Under the
authority of Massey-Ferguson, Inc. v. Laird, 432 So. 2d 1259
(Ala. 1983), when a limited remedy fails of its essential
purpose, the damages available in § 7-2-714, including
incidental and consequential damages, can be recovered,
despite the limitations in the contract.
In the instant case, the warranty issued by Barko
Hydraulics, LLC ("Barko"), limited recovery to the replacement
of defective parts and barred incidental and consequential
damages. However, the main opinion holds that there was
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sufficient evidence from which the jury could conclude that
Barko's warranty failed of its essential purpose.
Specifically, there were numerous complaints by Michael
Shepherd as to the hydraulic system as early as four months
after the 495ML loader was purchased. Those hydraulic-system
issues apparently were not resolved. As the main opinion
concludes: "Barko failed to correct the problems with the
495ML loader after repeated complaints and servicings. Given
the numerous attempts at repair over the extended period, the
jury could properly have concluded that the 495ML loader had
not been repaired and that the warranty had failed of its
essential purpose." ___ So. 3d at ___. Thus, the limitations
on remedies and damages were not applicable in this case.
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BRYAN, Justice (concurring in part and dissenting in part).
I concur in all aspects of the main opinion except
insofar as it reverses the judgment in its entirety and
remands for a new trial. I would affirm the judgment as to
liability, reverse the judgment as to damages, and remand for
a new trial on the issue of damages only. See, e.g., LaFarge
Bldg. Materials, Inc. v. Stribling, 880 So. 2d 415 (Ala.
2003).
Parker, J., concurs.
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STUART, Justice (concurring in the result in part and
concurring in part and dissenting in part as to the
rationale).
I agree with the conclusion of the main opinion that the
trial court erred by instructing the jury on mental-anguish
damages and subsequently entering judgment on the general
verdict returned by the jury, which presumably included such
damages. However, I believe that it is ultimately unnecessary
to address the damages issue because, in my view, the trial
court erred by denying the motion filed by Barko Hydraulics,
LLC ("Barko"), seeking a judgment as a matter of law on
Michael Shepherd's breach-of-warranty claim. That motion was
supported by the facts in the record and the law and should
have been granted at the close of evidence before the case was
submitted to the jury. Accordingly, although I too would
reverse the judgment entered by the trial court in toto, I
would remand the cause, not for a new trial, but for the trial
court to enter a judgment as a matter of law in favor of
Barko.
The main opinion correctly cites Ex parte Miller, 693 So.
2d 1372, 1376 (Ala. 1997), for the proposition that express
warranties are to be treated like any other type of contract
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and interpreted according to general contract principles. ___
So. 3d at ___. Foremost among those principles is the idea
that an agreement that is complete, clear, and unambiguous on
its face must be enforced according to the plain meaning of
its terms. Black Diamond Dev., Inc. v. Thompson, 979 So. 2d
47, 52 (Ala. 2007). In this case, the express warranty Barko
is alleged to have breached was clear and unambiguous –– Barko
warrantied that the 495ML loader purchased by Shepherd would
be "free from defects in material and workmanship under normal
use, maintenance and service." Importantly, this is the only
warranty at issue in this case; we are not concerned with
implied warranties –– only this express written warranty.
Shepherd asserts that Barko has breached this warranty;
however, he has not identified for this Court any evidence or
testimony in the record indicating that the 495ML loader
suffered from "defects in material and workmanship." Rather,
he essentially argues that the mere fact that the hydraulic
pumps on the 495ML loader failed is itself sufficient evidence
that the 495ML loader was defective. This argument is
encapsulated by the following excerpt from Shepherd's brief:
"For at least 40 years, evidence that a product
failed to function as warranted has been sufficient
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to present a breach-of-warranty claim to a jury.
Barko asks this Court to ignore that line of cases
and hold –– for the first time –– that a plaintiff
must present expert testimony detailing the exact
defect which caused the product to fail. Barko's
argument should be rejected.
"....
"Mr. Shepherd's burden is to prove that the
loader failed –– not why. If a loader is
manufactured using proper materials and in a
workmanlike fashion, it will not fail in the manner
this Barko loader failed. The evidence was in
dispute whether inadequate maintenance caused the
loader to fail. The trial court correctly submitted
this issue to the jury.
"Barko argues that Mr. Shepherd was required to
present evidence of the specific defect that caused
the loader not to operate as warranted. No Alabama
case law concerning a claim for breach of warranty
supports Barko's argument."
Shepherd's brief, pp. 14-16 (footnotes omitted). Shepherd's
argument might be persuasive if we were considering whether
there had been a breach of a broad implied warranty such as an
implied warranty of merchantability; however, in the context
of the express warranty in this case, his argument is, quite
simply, incorrect. As shown below, our caselaw makes it clear
that one asserting a breach-of-express-warranty claim based on
a warranty warranting a product to be free from defects in
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material or workmanship must present evidence of a specific
defect that constitutes a breach of the warranty.
The express warranty offered by Barko –– and accepted by
Shepherd –– provided that Barko would repair or replace
nonstructural components of the 495ML loader, such as the
hydraulic pumps, if those parts "prove[d] to be defective in
material or workmanship under normal use, maintenance and
service within one (1) year or 2,000 hours, whichever occurs
first from first day in service." (Emphasis added.) Notably,
Barko did not agree to repair or replace nonstructural
component parts of the 495ML loader merely upon proof of the
failure of a part. This Court explained the significance of
that difference in Ex parte Miller, another case involving a
warranty dispute and a Barko-manufactured piece of logging
equipment.
In Miller, the trial court entered a judgment as a matter
of law in favor of Pettibone Corporation, the parent company
of Barko, on various claims asserted by Thomas Miller, the
buyer of a Barko 775 feller buncher, after that feller buncher
experienced numerous hydrostatic failures. 693 So. 2d at
1373-74. Many of the Barko 775 feller buncher's components,
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including the hydrostat, were manufactured by Sauer-
Sundstrand, Inc. ("Sundstrand"), and Barko and Sundstrand
shared responsibility for the hydrostatic motor and pump under
a component warranty that had been issued Miller:
"'Sundstrand 36 series pumps and VII–160 motors
shall be warranted to the original owner for a
period of 24 months from in-service date of the
machine. During the first 6 months or 1,000 hours,
Barko/Sundstrand will determine if units are
warrantable.... After the first 6 months or 1,000
hours, component warranty will be determined by
Sundstrand.... It shall be the option of Barko
and/or Sundstrand to replace any failed units with
genuine Sundstrand rebuilt units. Such units may be
replaced more than once during the warranty."
693 So. 2d at 1375 n. 5. After the Court of Civil Appeals
affirmed the trial court's judgment, Miller petitioned this
Court for certiorari review, and, after granting his petition,
we ultimately reversed the judgment that that court had
entered on Miller's breach-of-express-warranty claim,
explaining:
"Pettibone argued, and the Court of Civil
Appeals agreed, that Miller had failed to present
substantial evidence of any 'warrantable defect' in
the hydrostat. Pettibone makes the same argument
here. The component warranty says that the
hydrostatic motor and pump 'shall be warranted to
the original owner' (emphasis added). It further
states that 'it shall be the option of Barko and/or
Sundstrand to replace any failed units with genuine
Sundstrand rebuilt units,' and that '[a]ny charges
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for repairs to failed pumps and/or motors which are
not warrantable as determined by Sundstrand will be
borne by the customer' (emphasis added).
"....
"The component warranty here does not
specifically state that it warrants against
'defects' in the product: rather, it warrants the
hydrostatic pumps and motors against 'failure.' The
Court of Civil Appeals based its affirmance on the
express warranty partly because it found that Miller
did not provide substantial evidence of a
'warrantable defect.' In other words, the Court of
Civil Appeals treated 'warrantable defect' as if it
was something that had to be found in every express
warranty claim, without reference to the language of
the warranty itself.
"On the contrary, '[c]are must be taken to avoid
elevating a defect in the goods to the status of an
essential element that must be shown in order to
recover for a breach of an express warranty.'
Ronald A. Anderson, Anderson on the Uniform
Commercial Code, § 2–313:217 (3d ed. 1995). If a
company such as Pettibone wishes to warrant only
defects in material and workmanship, then it may do
so; with such a warranty, the plaintiff would have
to show that the product was defective in order to
show that the goods did not conform to the warranty.
Conversely, if a company wishes to warrant against
all problems with its product, regardless of origin,
then it may do that as well. See Anderson, supra,
at § 2–313:205 ('A seller may make a warranty as
broad as the seller requires and may go beyond the
scope of those warranties that the law would
imply').
"In light of the broad language used in this
particular component warranty, we can see no other
interpretation than that it warrants against
'failures' of the hydrostat. Miller met his prima
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facie burden of showing that the hydrostat failed on
April 18, 1991, and other previous times, by
presenting testimony of the operators of the feller
buncher and of those who worked on the hydrostat
after it had broken down. We agree that, if this
warranty provided coverage for 'defects in material
and workmanship,' then Pettibone would have had at
least a plausible argument that Miller had not met
his evidentiary burden; however, Miller did offer
substantial evidence that the hydrostat failed on
April 18. Accordingly, we hold that Miller met his
evidentiary burden of proof concerning the
warrantability of the failure of the hydrostat."
693 So. 2d at 1376-77 (footnote omitted). Thus, in Miller we
held that it was error for the trial court to require a party
asserting a warranty claim to prove a specific defect in a
warrantied product when the warranty itself broadly warranted
against "failures" of the product. In the instant case, we
are presented with the converse situation –– the trial court
did not require a party asserting a warranty claim to produce
evidence of a specific defect in a warrantied product even
though the applicable warranty warranted only against defects
in material or workmanship. For the reasons explained in
Miller, this too was error. See Miller, 693 So. 2d at 1376
("If a company ... wishes to warrant only defects in material
and workmanship, then it may do so; with such a warranty, the
plaintiff would have to show that the product was defective in
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order to show that the goods did not conform to the
warranty.").
The main opinion quotes the admonition of Ex parte
Miller, 693 So. 2d at 1376, that "'"[c]are must be taken to
avoid elevating a defect in the goods to the status of an
essential element that must be shown in order to recover for
a breach of an express warranty,"'" ___ So. 3d at ___ n. 2
(quoting in turn Ronald A. Anderson, Anderson on the Uniform
Commercial Code § 2–313:217 (3d ed. 1995)), but fails to
recognize that that admonition was made in the context of a
warranty broadly warranting a product from any failure –– not
just a failure caused by a defect in material or workmanship.
Moreover, the main opinion inexplicably fails to give any
effect to the subsequent sentence in Ex parte Miller providing
that "[i]f a company ... wishes to warrant only defects in
material and workmanship, then it may do so," and, in fact,
the main opinion effectively holds the exact opposite –– a
company cannot warrant only defects in material and
workmanship and, if a company clearly and unambiguously does
so, this Court is providing notice in this opinion that it
will nevertheless rewrite the warranty to generally protect
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against any failure. This of course is contrary to our long-
standing precedent that we will enforce contracts as they are
written and will not rewrite them. Vankineni v. Santa Rosa
Beach Dev. Corp. II, 57 So. 3d 760, 762 (Ala. 2010).
Moreover, with regard to the global statement in the main
opinion that "[w]e conclude that the identification of an
existing defect is not essential to recovery upon an express
warranty," ___ So. 3d at ___, I would note that the terms of
an express warranty should dictate what evidence is required
to prove a breach of that warranty, not an all embracing rule
pronounced by this Court. See Cipollone v. Liggett Grp.,
Inc., 505 U.S. 504, 525 (1992) ("A manufacturer's liability
for breach of an express warranty derives from, and is
measured by, the terms of that warranty."). The Court of
Special Appeals of Maryland explained this principle as
follows in a breach-of-express-warranty case involving a tire:
"It is axiomatic in Maryland that an express
warranty is breached when a product fails to exhibit
the properties, characteristics, or qualities
specifically attributed to it by its warrantor, and
therefore fails to conform to the warrantor's
representations. The breach of an express warranty
of materials and workmanship is established by proof
of defects in the material or workmanship. The
breach of an express warranty that a roof will not
leak for 15 years is established by evidence that
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during that period of time the roof leaked. The
breach of an express warranty that pipes would seal
upon spill going through is established by evidence
that when the pipe was assembled and installed, the
joints did not seal when spill was pumped through
under pressure, and there was leakage. The breach
of an express warranty that a product will last for
four years is established by evidence that the
product did not last for that period of time. Thus,
no 'defect' other than a failure to conform to the
warrantor's representations need be shown in order
to establish a breach of an express warranty."
McCarty v. E.J. Korvette, Inc., 28 Md. App. 421, 437, 347 A.2d
253, 264 (1975) (footnotes omitted). See also Mac Pon Co. v.
Vinsant Painting & Decorating Co., 423 So. 2d 216, 219 (Ala.
1982) ("The reason liability is assessed for breach of
warranty, whether the warranty be express or implied, is that
goods have failed to conform to requirements imposed by the
warranty."). The United States District Court for the
Southern District of Alabama also properly applied this
principle in Tull Bros., Inc. v. Peerless Products, Inc., 953
F. Supp. 2d 1245, 1257 (S.D. Ala. 2013), when it held that
"[a] written warranty against defects in materials or
workmanship does not encompass a warranty against defects in
design."
Finally, although I have already noted that Shepherd
adduced no evidence of defects in material and/or workmanship
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that might serve as the basis for a breach-of-warranty claim
based on the express warranty in this case –– and,
accordingly, the jury's verdict is necessarily based on
nothing more than mere speculation that there might have been
such a defect –– I write further to emphasize the absence of
any expert testimony indicating that there was a defect in
material or workmanship. In both its preverdict motion for a
judgment as a matter of law and its renewed motion filed after
judgment was entered on the jury's verdict, Barko argued that
Shepherd had not established what caused the failure of the
hydraulic pumps on the 495ML loader, much less that that
failure was caused by a defect in material or workmanship.
Barko also argued that Shepherd's failure to introduce any
expert testimony establishing a defect was fatal to his case.
In both motions it quoted the following passage from this
Court's opinion in Brooks v. Colonial Chevrolet-Buick, Inc.,
579 So. 2d 1328, 1333 (Ala. 1991):
"In this case, the [plaintiffs], by their own
admission, had no knowledge whatever regarding the
brake system of an automobile. Furthermore, they
offered no expert testimony as to the existence of
a design defect –– they did not even attempt to
offer any expert opinion related to the repair
records concerning the complaints about the brakes
that they had made to Colonial, nor did they attempt
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to offer any expert testimony related to their
allegations of a design defect in the brake system.
The only evidence the [plaintiffs] presented
concerning a defect in design was their own
testimony as to the alleged defectiveness of the
brakes and as to the alleged injuries they suffered
as a result. Such evidence as to the cause of a
product failure amounts to mere speculation and
conclusory statements ...."
Like Brooks, the only supposed "evidence" of a defect in
material or workmanship in this case was the fact that a piece
of equipment failed.7 Although it bears repeating that the
mere fact that a piece of equipment fails is not substantial
evidence showing that there was a defect in materials or
workmanship –– there was, after all, testimony indicating that
the failure of the hydraulic pumps could be attributable to
just normal wear and tear after approximately 4,300 hours of
operation –– it is especially inappropriate to make that
conclusion with regard to complicated equipment like the
hydraulic system on heavy logging equipment in the absence of
any expert testimony. As this Court further stated in Brooks:
7
Also like the plaintiffs in Brooks, who admitted they had
no knowledge of an automotive brake system, 579 So. 2d at
1333, Shepherd acknowledged in his deposition that his
mechanical expertise with regard to heavy logging equipment
was essentially limited to changing oil and parts and that he
was not equipped to diagnose problems in such equipment.
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"The [plaintiffs] contend that the instant case
does not present a situation so complex or
complicated that an expert is necessary to explain
the cause and effect of that situation to the
jurors. However, an automobile brake system is
composed of, among other parts, cali[p]ers, rotors,
discs, rear wheel cylinders, brake shoes, and master
cylinders; it is a system composed of parts that
would not be familiar to the lay juror, and the lay
juror could not reasonably be expected to understand
that system and determine if it was defective,
without the assistance of expert testimony. In
essence, it is a system that appears to be precisely
the type of complex and technical commodity that
would require expert testimony to prove an alleged
defect."
579 So. 2d at 1333. It seems uncontroversial to presume that
a typical juror would likely be more familiar with the brake
system on an automobile than the hydraulic system on heavy
logging equipment; accordingly, Brooks would indicate that
expert testimony was necessary in this case as well and that
Shepherd's failure to present such evidence required the
granting of Barko's motion for a judgment as a matter of law.8
8
In Ex parte General Motors Corp., 769 So. 2d 903, 912-13
(Ala. 1999), this Court distinguished Brooks and held that
expert testimony was not required in a breach-of-warranty case
involving a claim that an automobile was defective. However,
the warranty at issue in that case was the implied warranty of
merchantability, not an express warranty as in this case. A
breach of the implied warranty of merchantability requires
proof that a product was not "'fit for the ordinary purposes
for which such goods are used,'" id. at 913 (quoting § 7-2-
314(2)(c), Ala. Code 1975), while a breach of an express
warranty requires proof that the warrantied product failed to
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Accordingly, because neither substantial evidence nor any
expert testimony was adduced at trial indicating that the
495ML loader manufactured by Barko and purchased by Shepherd
suffered from a defect in material and/or workmanship, the
trial court erred by not granting Barko's motion for a
judgment as a matter of law. This Court should accordingly
direct the trial court to enter a judgment as a matter of law
in favor of Barko; consideration of the other issues raised by
the parties is unnecessary.
conform with the representations made in the express warranty
–– in this case that the 495ML loader would be free from
"defects in material and workmanship." Thus, expert testimony
might not have been necessary to establish a hypothetical
breach-of-implied-warranty-of-merchantability claim in this
case, because Shepherd arguably submitted substantial evidence
indicating that the 495ML loader was not fit for its intended
purpose. However, the only claim submitted to the jury in
this case was a breach-of-express-warranty claim, and Shepherd
submitted no evidence, much less the expert testimony required
by Brooks, establishing a breach of the express warranty made
by Barko that the 495ML loader would be free from "defects in
material and workmanship."
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