Canterbury Apartment Homes Llc v. Louisiana Pacific Corporation ( 2014 )

FILED
COURT OF APPEALS
DWIStDHTI
201Li JUL 22 AM 60: 74
IN THE COURT OF APPEALS OF THE STATE OF WASHINOWASi ifdliTOw'
DIVISION II
CANTERBURY APARTMENT . HOMES No. 44545 -0 -II
LLC, a Washington limited liability company,
Respondent,
v.
LOUISIANA PACIFIC CORPORATION, , a UNPUBLISHED OPINION
Delaware corporation,
Appellant.
MELNICK, J. — Louisiana Pacific Corporation ( LP) appeals the trial court' s denial of its
motions for judgment as a matter of law and for a new trial after a jury found it liable to
Apartment Homes, LLC ( Canterbury) in the amount of $ 755, 314. 17 for defective
Canterbury
siding. First, LP argues the trial court erred when it concluded that the remedy listed in LP' s 25-
year written warranty ( hereinafter " Limited Warranty ") was not Canterbury' s sole and exclusive
remedy. Second, LP argues the trial court erred when it instructed the jury on failure of essential
purpose for the remedy provided in the Limited Warranty. Finally, LP argues the jury
instructions improperly required the jury to award damages outside the remedy listed in the
Limited Warranty and that Canterbury presented insufficient evidence to support the jury' s
award of damages. Because the Limited Warranty does not contain an unmistakable expression
that the exclusive remedy was contained therein, we hold Canterbury could avail itself of other
remedies under Washington law. Next, we hold that the trial court erred by giving the failure of
essential purpose instruction but because it did not prejudice LP, the error was harmless. Last, we
hold that when read as a whole, the jury instructions properly instructed the jury on the law and
submitted sufficient evidence to support the jury' s damages award. We affirm.
that Canterbury
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FACTS
I BACKGROUND
Canterbury is a 180 -unit apartment complex constructed in 1995 with Inner -Seal siding
manufactured by LP. The siding came with a written Limited Warranty that covered " against
manufacturing defects under normal conditions of use and exposure" for 25 years if the siding
was properly installed and maintained. Clerk' s Paper' s ( CP) at 74.
A nationwide class settlement in 1996 ( hereinafter " Settlement Agreement ") involved the
same LP siding and provided a process through which claimants with defective siding installed •
prior to January 1, 1996 could submit claims and receive compensation. The settlement class
included " all Persons who have owned, own, or subsequently acquire Property on which Exterior
Inner -Seal Siding has been installed prior to January 1, 1996." CP at 329. The Settlement
Agreement provided that the " Agreement shall be the sole and exclusive remedy for any and all
Settled Claims of Settlement Class members." CP at 345. The Settlement Agreement term
ended January 1, 2003. Because the United States District Court for the District of Oregon
recognized that some claimants' siding may become defective after the settlement term ended, it
amended the Settlement Agreement so that settled claims did not include " claims made against
L - after the expiration of the term of the Settlement Agreement under the express terms of the
P
L - 25 -year Limited
P Warranty issued with the product." CP at 264.
II. EVIDENCE OF DAMAGE TO CANTERBURY' S SIDING
In December 2008, Ray Dally, the owner of Canterbury, noticed chunks of siding missing
on one of the apartment buildings, mushrooms growing out of the siding, and areas of the siding
becoming concave. When Dally later noticed more pervasive problems with the siding, he hired
Qualified Envelope Diagnostics in spring 2011 to evaluate the siding and provide a report on its
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0
condition. Erin Weatherspoon, a Qualified employee, first visited Canterbury on May 3, 2011,
and then returned with two other Qualified employees later in the month to perform a four -
day
forensic evaluation of the siding. Weatherspoon testified that the siding was deteriorating,
delaminating, splitting, that there was material loss and fungal growth, and that the deterioration
was much everywhere" on the Canterbury buildings. II Report of Proceedings ( RP) at
pretty
131.
On May 26, 2011, Canterbury sent LP a letter requesting, per the Limited Warranty, that
LP inspect the siding within 60 days because Canterbury wanted to replace the siding.' In the
letter, Canterbury included the information LP requested on its claim form and some pictures
from Qualified' s inspection. It also offered LP a copy of Qualified' s report; however, LP never
asked for the report. On June 8, Canterbury submitted the LP claim form/questionnaire to LP
with another letter.
By August 10, Canterbury still had not heard from LP about scheduling an inspection so
on that day Canterbury sent a letter to LP informing it that Canterbury planned to begin
replacement of the siding on September 2. The third week of August, LP sent a third - arty
p
inspector to Canterbury to perform a two -day evaluation of the siding. The third - arty inspector
p
had to complete the inspection and evaluation of the building pursuant to a warranty inspector
training manual LP created in 2003. The inspection protocol utilized at Canterbury differed from
the inspection protocol used pre -2003, during the Settlement Agreement term.
After seeking bids from at least six companies, Canterbury began removal and
replacement of the siding in September 2011. Canterbury hired Laer Enterprises which provided
1
Dally testified that he wanted to start replacing the siding as soon as possible before the winter
months.
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the lowest bid. Anatoly Laer, Laer Enterprises' s owner, testified that he replaced the siding with
Hardie, fiber cement, siding. He started the job in September and finished in approximately
April 2012. Laer testified that the LP siding had deteriorated and delaminated and that every
wall of every building had some deteriorated siding. Laer and Dally also testified that because
there was deteriorated siding on all walls and because of the siding' s installation, they could not
replace only the damaged siding. Instead, Laer testified that every board of siding above the
deteriorated board had to be removed to get to the deteriorated board, so when there was
deteriorated siding on a wall, he replaced the whole wall of siding.
When Canterbury started to remove the siding, Weatherspoon returned to evaluate the
back of the siding boards. At that time, Weatherspoon contacted Warren Harris from Case
Forensics to " characterize the composition and mode of failure of siding planks." III RP at 220.
Canterbury also asked Harris to " assess the degree of damage and photographically document,
memorialize the damage at the Canterbury Apartments," and " to investigate the adequacy of
assessment by others." III RP at 220 -21. Harris concluded there existed " dimensional instability
between the rigid paper" on the siding and that the " mobile or moving woods fibers was
incompatible." III RP at 238. Harris concluded that permanent damage to 70 percent of the
siding existed.
After LP' s August 2011 inspection, Canterbury finally heard from LP on October 12. LP
offered Canterbury $ 8, 363 for the damaged siding and claimed it found that damage existed in
only 11 percent of the siding. Canterbury responded and objected to both the amount offered
and the amount of damage LP found. It asked LP to explain the standards its inspector used to
evaluate the siding. LP never responded to Canterbury' s letter, never sent another inspector out,
and never asked Canterbury to save any of the siding being replaced.
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II. EVIDENCE OF AMOUNT OF DAMAGES
At trial, Canterbury did not produce records for the purchase price of the LP siding in
1995. did that it paid Laer a total of $817, 584.44 to replace the
Canterbury proffer evidence
siding. It also paid a company $ 105, 439. 34 to paint the new siding. Additionally, Canterbury
to have the re- sided. The
county $ 16, 893. 11 for apartments
paid the building permits
replacement cost totaled $939, 916. 89.
LP testified it arrived at its claim for damages of $ 8, 363 by resorting to the Limited
Warranty that stated the remedy would be twice the retail cost of the original siding, less the
aging deduction. LP used the highest amount its sales department had on record for the retail
price before 1996, which was $ 0. 52 per square foot. It then doubled the amount per the Limited
Warranty to $ 1. 04 per square foot. Lastly, LP calculated the aging deduction based on the
number of years it had been since the siding was installed.
III. PROCEDURAL HISTORY
On November 11, 2011, Canterbury filed a claim for breach of written warranty, breach
of warranties created by advertising or similar communications to the public, and violations of
the Washington Consumer Protection Act. By order of the United States District Court for the
District of Oregon, Canterbury and LP stipulated to a dismissal with prejudice of Canterbury' s
latter two claims.
LP filed a motion to enforce the settlement agreement and asked the federal court to order
to take further to prosecute released claims against LP. In its July 26,
Canterbury no steps any
2012, opinion the federal court concluded " that [ Canterbury] is a class member and
Canterbury' s] remedy, if any, is the 25 -year warranty. L - claims that [ Canterbury] cannot
P
pursue the warranty claim in state court, but the warranty does not contain any language
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precluding state court action." CP at 32. LP then moved the federal court to enforce its July 26,
2012 order and hold that Canterbury' s sole and exclusive remedy was the remedy provided in the
Limited Warranty. The federal court stated that in its July 26, 2012 order it " did not make any
determination concerning Canterbury' s damages, only the claims it could pursue." CP at 109.
The federal court then held that the " Washington state trial court is in the best position to
interpret the warranty in light of Washington law, and to make rulings concerning Canterbury' s
remedies and damages." CP at 109.
Before trial, LP submitted a motion in limine to preclude Canterbury from introducing
money it to the siding. LP argued that the
evidence regarding the amount of paid replace
Limited Warranty provided Canterbury' s sole and exclusive remedy and evidence of
replacement costs was irrelevant and prejudicial. The trial court denied LP' s motion. The case
proceeded to a jury trial. At the close of Canterbury' s case and the close of its case, LP moved
for judgment as a, matter of law. It renewed its argument that Canterbury' s sole and exclusive
remedy was the remedy listed in the Limited Warranty. The trial court denied LP' s motions.
Regarding the exclusivity of the Limited Warranty, the trial court concluded that the
Limited Warranty did not provide Canterbury' s sole and exclusive remedy because it did not
contain unmistakable language that the stated remedy is the exclusive remedy: " In this warranty,
L - disclaims other warranties but does not clearly state that the remedy provided is the
P
exclusive remedy. It certainly had the ability to include language which says that this is the sole
do that in this VI RP 833. The trial court also
remedy, but it did
and exclusive not case." at
stated that LP " holds all the cards" under the Limited Warranty; "[ i]t determines, after the
inspection and verification, if there is a failure under the warranty, according to the criteria and
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the protocols that it has developed, ... which were different, as has been pointed out at trial,
from the protocols that were used under the class action lawsuit." VI RP at 833 -34.
The trial court gave jury instruction 9, over LP' s objection, which stated: " The limited
remedy stated in the warranty is not the sole and exclusive remedy available under the warranty."
CP at 198. Also over LP' s objection, the trial court gave the following instruction jury
instruction 10) for calculating damages:
It is the duty of the Court to instruct you as to the measure of damages.
By instructing you on damages the Court does not mean to suggest the amount of
any damages that should be awarded. With regard to the breach of warranty
claim of Plaintiff, in your determination of damages, you are to use the following
measure of damages in the amounts proved by Plaintiff:
The difference at the time and place of acceptance between the value of
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.
The costs of repair and /or replacement may be evidence of the difference
between the value of goods as accepted and their value as warranted.
CP at 199. Finally, the trial court instructed the jury as to failure of essential purpose of the
remedy provided in the Limited Warranty, over LP' s objection, in jury instruction 11:
If the remedy provided in the warranty fails of its essential purpose, the
remedy is the difference at the time and place of acceptance between the value of
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. The
costs of repair and /or replacement may be evidence of the difference between the
value of goods as accepted and their value as warranted.
A limitation of remedies fails of its essential purpose when the limitation
deprives a party of the substantive value of its bargain, or it fails to provide
minimum adequate remedies.
CP at 200. The jury also had a copy of the Limited Warranty, and LP argued in closing that the
damages according to the remedy in the Limited Warranty. LP never
jury should award stated
proposed an instruction regarding the remedy stated in the Limited Warranty.
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LP also objected to Canterbury' s proposed verdict form, which asked only for the jury' s
final damages calculation and proposed an alternate verdict form, which asked the jury to
determine the amount of damaged siding and then the amount of damages. The trial court
refused LP' s proposed verdict form and concluded that it could be seen as a comment on the
evidence.
The jury found for Canterbury in the amount of $755, 314. 17. LP renewed its motion for
judgment as a matter of law and moved for a new trial on December 17, 2012. The trial court
denied LP' s motions. LP appeals.
ANALYSIS
LP argues the trial court erred by denying its motions for judgment as a matter of law and
for a new trial for three reasons. First, LP argues the trial court erred by instructing the jury that
the remedy stated in the Limited Warranty was not the sole and exclusive remedy available to
Canterbury. Second, LP argues the trial court erred by giving the jury the failure of an essential
purpose instruction. Third, LP argues the trial court erred by rejecting its argument that no
legally sufficient basis supported the jury' s damages award. We disagree.
I. STANDARD OF REVIEW
We review a trial court' s denial of a CR 50 motion for judgment as a matter of law de
novo, engaging in the same inquiry as the trial court. Schmidt v. Coogan, 162 Wn.2d 488, 491,
173 P. 3d 273 ( 2007). Judgment as a matter of law is proper only when, viewing the evidence in
the light most favorable to the nonmoving party, substantial evidence cannot support a verdict
for the nonmoving party. Schmidt, 162 Wn.2d at 491, 493.
Generally, we review the denial of a new trial to determine if the trial court' s decision is
manifestly unreasonable, is exercised for untenable reasons, or is based on untenable grounds.
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Edwards v. Le Duc, 157 Wn. App. 455, 459, 238 P. 3d 1187 ( 2010). But when an error of law is
cited as grounds for a new trial, we review the alleged error of law de novo. Edwards, 157 Wn.
459. The law complained of must be prejudicial. Dickerson v. Chadwell, Inc.,
App. at error of
62 Wn. App. 426, 429, 814 P. 2d 687 ( 1991).
II. EXCLUSIVITY OF LIMITED WARRANTY REMEDY
LP argues that Canterbury' s sole remedy is stated in the Limited warranty because ( 1) it
should be read in conjunction with the Settlement Agreement; ( 2) based on the federal court' s
from claiming 3) the
2012 rulings, Canterbury is .collaterally estopped another remedy; and, (
plain language of the limited warranty mandates this result.
Because the Limited Warranty does not contain an unmistakable expression that it is the
exclusive remedy, Canterbury could pursue other available remedies under Washington law.
Thus, we hold the Limited Warranty does not provide the exclusive remedy and the trial court
correctly denied LP' s motion for judgment as a matter of law on this issue.
A. THE SETTLEMENT AGREEMENT DOES NOT STATE THE REMEDY PROVIDED IN THE
LIMITED WARRANTY IS CANTERBURY' S EXCLUSIVE REMEDY
LP argues the Settlement Agreement and the Limited Warranty must be interpreted
together and that the sole remedy available to Canterbury is pursuant to the express terms of the
Limited Warranty. Because the federal court ordered that the Limited Warranty applied after the
Settlement Agreement term ended, but made no legal determination as to the scope of the
remedies available under the Limited Warranty, we disagree.
The Settlement Agreement states it " shall be the sole and exclusive remedy for any and
all Settled Claims of Settlement Class members." CP at 345. An amendment to the Settlement
Agreement stated that settled claims do not include " claims made against L - after the expiration
P
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of the term of the Settlement Agreement under the express terms of the L - 25 -year Limited
P
Warranty issued with the product." CP at 264. The amendment to the Settlement Agreement
further clarified the release of claims:
The release in the Settlement Agreement is amended to exclude claims filed
against L - after the expiration of the Settlement Agreement by consumers under
P
the terms of the L - 25 -year Limited Warranty.
P At the termination of the
Settlement Agreement, L - s 25 -year Limited Warranty shall be in effect for the
P'
balance of its term when measured from the date of original installation of the
claimant' s siding.
CP 'at 268.
The Settlement Agreement did not specify the remedies available to a party under the
Limited Warranty; it merely stated that at the conclusion of the Settlement Agreement period,
LP the Limited Warranty. And while the Settlement
parties may file a claim against under
Agreement did state that the amendment to the Settlement Agreement was " fair, reasonable, and
adequate and in the best interests of the Class," it did not specifically state that the remedy
provided in the Limited Warranty was fair, reasonable, and adequate, or that it was the exclusive
remedy under the Limited Warranty. CP at 259. Accordingly, when interpreted together LP' s
argument fails.
B. THE FEDERAL DISTRICT COURT RULINGS Do NOT STATE THE REMEDY PROVIDED
IN THE LIMITED WARRANTY IS CANTERBURY' S EXCLUSIVE REMEDY
LP next argues the federal court' s 2012 orders collaterally estop Canterbury from pursing
any remedy other than the remedy provided in the Limited Warranty. We disagree. Because the •
federal court specifically ruled that the state court should rely on Washington law to determine
the remedy provided in the Limited Warranty, this argument fails.
filed four LP. In its complaint, Canterbury
Canterbury initially claims against
specifically. claimed LP should be responsible for the full cost of repair and /or replacement of the
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siding as provided by Washington law. It alleged that the Limited Warranty did not contain
express language stating the Limited Warranty' s remedies were exclusive. In ruling on LP' s
motion to enforce the Settlement Agreement, the federal court concluded " that [ Canterbury] is a
remedy, if any, is the 25 -year warranty..
L - claims that
P
class member and [ Canterbury' s]
Canterbury] cannot pursue the warranty claim in state court, but the warranty does not contain
CP at 32.
any language precluding state court action."
LP then moved the federal court to enforce its July 26, 2012 order and hold that
Canterbury could avail itself of only the remedy stated in the Limited Warranty. The federal
court held that it " did not make any determination concerning Canterbury' s damages, only the
claims it could pursue," and the " Washington state trial court is in the best position to interpret
the warranty in light of Washington law, and to make rulings concerning Canterbury' s remedies
and damages." CP at 109. Thus, the federal court did not conclude whether the remedy
provided in the Limited Warranty is exclusive. Instead, the federal court ordered Canterbury to
its LP its claim for breach of the Limited Warranty. It
dismiss all of claims against except
allowed the trial court discretion to interpret Washington law to determine the specific remedies
and damages available under the Limited Warranty. Thus, we hold Canterbury is not collaterally
estopped from pursuing remedies other than the remedy listed in the Limited Warranty because
the federal court did not decide this issue.
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C. THE LIMITED WARRANTY DOES NOT STATE THE LISTED REMEDY IS THE SOLE
AND EXCLUSIVE REMEDY
LP argues the language of the warranty itself demonstrates the parties' express intent that
the listed remedy is the sole and exclusive remedy. Because the Limited Warranty does not
clearly express that the listed remedy is the sole and exclusive remedy, we hold that the Limited
Warranty does not provide Canterbury' s exclusive remedy.
Parties may contract for an exclusive remedy for a breach of warranty. Shepler Constr.,
Inc. v. Leonard, 175 Wn. App. 239, 246, 306 P. 3d 988 ( 2013) ( citing Graoch Assocs. # 5 Ltd.
P' ship v. Titan Constr. Corp., 126 Wn. App. 856, 865, 109 P. 3d 830 ( 2005)). But " resort to a
remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which
case it is the sole remedy." RCW 62A. 2- 719( 1)( b). The comments to subsection ( 1)( b) further
clarify that "[ s] ubsection ( 1)( b) creates a presumption that clauses prescribing remedies are
cumulative rather than exclusive. If the parties intend the term to describe the sole remedy under
the contract, this must be clearly expressed. RCW 62A.2 -719, UCC cmt. 2. Thus, " the contract
intent to the Shepler
clearly indicate the
must parties' make stipulated remedy exclusive."
Constr., 175 Wn. App. at 246; see also Torgerson v. One Lincoln Tower, LLC, 166 Wn.2d 510,
522, 210 P. 3d 318 ( 2009) ( "[ P] rovisions limiting remedies in a consumer transaction must be
explicitly negotiated between buyer and seller and be set forth with particularity. "); Nw
Perfection Tire Co. v. Perfection Tire Corp., 125 Wash. 84, 92, 215 P. 360 ( 1923) ( a remedy is
not exclusive " unless the contract by unmistakable terms so provides ")).
Here, there is no unmistakable expression that the remedy listed in the Limited Warranty
is the sole and exclusive remedy. The Limited Warranty warrants the siding " for a period of 25
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years from the date of installation against manufacturing defects under normal conditions of use
and exposure." CP at 74. It further provides that:
L -P must be given a 60 -day opportunity to inspect the siding before it will
honor any claims under the above warranty. If after inspection and verification of
the problem, L - determines that there is a failure covered by the above warranty,
P
L - will refund to the owner an amount of money equal to twice the retail cost of
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the original siding material. The cost of labor and materials other than siding are
not included. Warranty payments will be based upon the amount of affected
siding material.
During the first 5 years, L - s obligation under the above warranty shall
P'
be limited to twice the retail cost of the siding material when originally installed
on the structure.
If the original siding cost cannot be established by the owner the cost shall
be determined by L - in its sole and reasonable discretion.
P
During the 6th through 25th year, as determined in the above manner,
warranty payments shall be reduced equally each year such that after 25 years
from the date of installation no warranty shall be applicable.
Except for the express warranty and remedy set forth above, L - disclaims
P
all other warranties, express or including implied warranties of
implied,
merchantability or fitness for a particular purpose.
This warranty gives you specific legal rights and you may also have other
rights which vary from state to state.
CP at 74. This Limited Warranty provides only an optional remedy of "twice the retail cost of
the original siding material," which " shall be reduced equally each year" under the aging
deduction. CP at 74. But it contains no clear or unmistakable terms that the provided remedy is
the sole and exclusive remedy.
Our Supreme Court has held that where a written warranty guaranteed " all tires, tubes
and casings to be in good condition and to make good all defects therein due to defective
manufacture," the written replacement remedy was not exclusive but permissive because an
injured party is only obliged to resort to the listed remedy if the " contract by unmistakable terms
so provides. Nw Perfection Tire, 125 Wash. at 92; see also Graoch, 126 Wn. App. at 865 -66
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holding that one year warranty not an exclusive remedy for defective construction where the
contract did not so state). Like the warranty in Northwest Protection Tire, the Limited Warranty
here contains no unmistakable terms that the listed remedy is the exclusive remedy; rather, it
Further, the
merely provides a permissive remedy if siding fails under the express warranty.
Limited Warranty specifically references that parties may have other rights under state law.
Thus, while LP certainly provided a limited warranty for the siding by specifically listing what
the express warranty covered and disclaiming all other warranties, it did not provide for a limited
and exclusive remedy for failure of the siding under the express warranty.
Accordingly, the listed remedy is presumed optional and not exclusive. See RCW 62A.2-
719( 1)( b). We hold the remedy listed in the Limited Warranty is not exclusive, Canterbury had
the right to pursue remedies and damages available under state law, and the trial court properly
denied LP' s motions for judgment as a matter of law and a new trial regarding this issue.
III. FAILURE OF ESSENTIAL PURPOSE
LP next argues the trial court erred by instructing the jury on failure of essential purpose.
Although the trial court erred by giving a failure of essential purpose instruction, the error was
harmless.
We review alleged errors of law in jury instructions de novo. Blaney v. Int' l Ass 'n of
Machinists & Aerospace Workers, Dist. No. 160, 151 Wn.2d 203, 210, 87 P. 3d 757 ( 2004). Jury
instructions are proper when they permit the parties to argue their theories of the case, do not
mislead the jury, and properly inform the jury of the applicable law. Hue v. Farmboy Spray Co.,
127 Wn.2d 67, 92, 896 P. 2d 682 ( 1995).
Under the UCC, "[ w]here circumstances cause an exclusive or limited remedy to fail of
in this Title." RCW 62A.2- 719( 2).
its essential purpose, remedy may be had as provided
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Because the trial court had already decided as a matter of law that the Limited Warranty remedy
was not exclusive and gave such an instruction to the jury, the trial court erred in also giving the
failure of essential purpose instruction. Failure of essential purpose is relevant only with an
exclusive or limited" remedy. See RCW 62A.2- 719( 2).
An erroneous jury instruction is harmless if it is ` not prejudicial to the substantial rights
of the part[ ies] ... , and in no way affected the final outcome of the case. ' Blaney, 151 Wn.2d
at 211 ( alteration in original) ( quoting State v. Britton, 27 Wn.2d 336, 341, 178 P.2d 341 ( 1947)).
Whereas, a prejudicial error " affects or presumptively affects the results of a case, and is
prejudicial to a substantial right." Blaney, 151 Wn.2d at 211. When evaluating an erroneous
instruction, we presume the error is prejudicial " subject to a comprehensive examination of the
record." Blaney, 151 Wn.2d at 211.
Scrutiny of the record in this case reveals that the erroneous failure of essential purpose
instruction was harmless because LP suffered no prejudice. The method to calculate damages
for failure of essential purpose was the same calculation the jury used to calculate the damages it
found. Here, if the jury decided to not award damages under the remedy provided in the Limited
Warranty, the trial court instructed that it could award damages under RCW 62A.2- 714(2),
which provides: " 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." The trial court also instructed the jury that if it determined that the remedy
provided in the Limited Warranty failed its essential purpose, then it was instructed that it should
calculate damages in the following manner:
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T] he difference at the time and place of acceptance between the value of 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. The costs
of repair and /or replacement may be evidence of the difference between the value
of goods as accepted and their value as warranted.
CP at 200. Accordingly, because the substantive outcome, the manner in which the jury
calculated damages, is the same regardless of the failure of essential purpose instruction, the
erroneous instruction was harmless.
IV. SUFFICIENT BASIS FOR DAMAGES
Lastly, LP argues ( 1) the jury instructions required the jury to award damages beyond the
express terms of the Limited Warranty, ( 2) Canterbury offered no evidence of damages under the
measure provided by the UCC, ( 3) replacement cost cannot be used as a measure for damages,
and (4) the verdict form was insufficient and misleading.
A. JURY INSTRUCTIONS
LP argues " Jury Instruction No. 10 tied the jury' s hands, forcing a damages award in
the Limited therefore in error." Appellant' s
excess of the one provided under Warranty, and was
Br. at 44. We disagree. "` Parties are entitled to instructions that, when taken as a whole,
properly instruct the jury on the applicable law, are not misleading, and allow each party the
opportunity to argue their theory of the case.'" State v. Ridgley, 141 Wn. App. 771, 779, 174
P. 3d 105 ( 2007) ( quoting State v. Redmond, 150 Wn.2d 489, 493, 78 P.3d 1001 ( 2003)).
Jury instruction 10 provided:
It is the duty of the Court to instruct you as to the measure of damages.
By instructing you on damages the Court does not mean to suggest the amount of
any damages that should be awarded. With regard to the breach of warranty
claim of Plaintiff, in your determination of damages, you are to use the following
measure of damages in the amounts proved by Plaintiff:
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The difference at the time and place of acceptance between the value of
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.
The costs of repair and /or replacement may be evidence of the difference
between the value of goods as accepted and their value as warranted.
CP at 199. Jury instruction 9 provides: " The limited remedy stated in the warranty is not the sole
and exclusive remedy available under the warranty." CP at 198.
LP argues the trial court did not instruct the jury on the method to calculate damages
under the Limited Warranty remedy. But, LP did not propose such an instruction. Further, when
read as a whole, these jury instructions correctly stated the applicable law. The instructions
properly instructed the jury that the Limited Warranty remedy was not the sole and exclusive
remedy. The instructions did not state that the Limited Warranty remedy was not available, only
that if it chose to award damages outside the Limited Warranty remedy, the jury was to use the
measure of damages provided in jury instruction 10. Further, the instructions as a whole allowed
each party to argue their theory of the case and damages. LP did argue its theory of damages.
VII RP at 883 ( " It is that warranty, that when you go back to the jury room, [ LP] will ask that
you follow the remedy in the warranty and make your decision on the amount of damages that
Canterbury] should be awarded. "), VII RP at 902 ( " Also what you could do, as part of your —as
a damages calculation would be to follow the warranty. You are familiar with Exhibit 9, the
warranty. The stated remedy is a refund to the owner of the amount of money equal to twice the
retail cost of the original siding material. "), VII RP at 910 ( " We ask when you go back to the
jury room, you follow the warranty remedy. "). Accordingly, the jury instructions did not require
the jury to award damages outside the warranty remedy and LP' s argument fails.
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B. DAMAGES AWARD IS SUPPORTED BY THE LAW AND SUFFICIENT EVIDENCE
LP next argues Canterbury failed to offer evidence of the difference between the value of
the siding as accepted and the value of the siding as warranted, and that the trial court improperly
allowed evidence of replacement costs. Because repair and /or replacement costs are a proper
measure of damages under the UCC and Canterbury presented evidence of the costs to replace
the defective siding, the damages award is supported by the law and by sufficient evidence.
Under RCW 62A. 2- 714( 2), the cost of repair or replacement can be used to measure the
difference in value as is and as warranted. Miller v. Badgley, 51 Wn. App. 285, 296 n.6, 753
P. 2d 530 ( 1988) ( citing J. White & R. Summers, Uniform Commercial Code § 10 -2, at 377 ( 2d
ed. 1980)). Our Supreme Court also stated that repair costs may be used as a measure of
damages:
Courts generally recognize that "[ r] epair costs are an appropriate
alternative measure of damages for breach of warranty." Miller v. Badgley, 51
Wn. App. 285, 296, 753 P. 2d 530, review denied, 111 Wn.2d 1007 ( 1988); [ 2 Roy
R. Anderson, Damages Under the Uniform Commercial Code § 10: 06, at 16
T] he overwhelming judicial consensus has been that [ repair] costs are
1992)] ( "[
strong evidence of the difference between the value of the goods as accepted and
their value as warranted. "); [ 1 James J. White & Robert S. Summers, Uniform
Commercial Code § 10 -2, at 504 -05 ( 3d ed. 1988)] ( noting that repair costs may
be a " useful objective measurement of the difference in value ", but pointing out
that the measure has " limitations ").
Fed. Signal Corp. v. Safety Factors, Inc., 125 Wn. 2d 413, 440, 886 P. 2d 172 ( 1994). Further, LP
acknowledged that the cases recognize repair costs as a measure of damages, and specifically
objected only to the use of replacement costs to calculate damages. But, here, it was not possible
to repair the defective siding without replacing it. And we find no distinction between repair
and replacement in the context of defective siding that cannot be repaired without replacing it.
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Accordingly, it was proper to allow evidence of Canterbury' s replacement costs to prove
damages under RCW 62A.2- 714( 2).
Further, Canterbury presented sufficient evidence of its damages. Canterbury presented
evidence of the damage to the siding through expert testimony. It also presented evidence that
because of how the siding had been installed, replacement of only the defective boards would not
be possible. Canterbury provided evidence of the lowest bid it received to replace the siding, the
costs the company charged to remove the old siding and install new siding, the costs to have the
new siding painted, and the county permit and charge for the permit to have the siding work
completed. Thus, Canterbury presented sufficient evidence to support the jury' s damages award.
C. VERDICT FORM
Finally, LP argues the verdict form was insufficient and misleading because it asked the
jury to provide only the amount of damages it awarded. To support its argument, LP cites one
case, Davis v. Microsoft Corp., 149 Wn.2d 521, 539, 70 P. 3d 126 ( 2003), which concludes that
where a general verdict is rendered in a multitheory case and one of the theories is later
invalidated, remand must be granted if the defendant proposed a clarifying special verdict form."
the damages it awarded. As
The verdict form here asked the jury to provide amount of
we have discussed, the jury instructions were not misleading and, the jury could have awarded
the Limited the jury instruction 10 remedy. The verdict
damages under Warranty remedy or
form here did not improperly compel the jury to choose one damages calculation over the other.
It merely asked the jury to provide its final damages calculation. Further, LP' s proposed verdict
form have provided clarification regarding the jury' s damage award. Thus, we
would not any
hold the court did not err by providing the jury with this verdict form:
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Because the Limited Warranty does not contain an unmistakable expression that the
exclusive remedy is contained therein, we hold Canterbury could avail itself of other remedies
under Washington law. Next, we hold that the trial court erred by giving the failure of essential
purpose instruction but because it did not prejudice LP, the error was harmless. Last, we hold
that when read as a whole, the jury instructions properly instructed the jury on the law and
Canterbury submitted sufficient evidence to support the jury' s damages award. We affirm.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW
2. 06. 040, it is so ordered.
We concur:
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