ANGOLA FARM SUPPLY & EQUIPMENT v. FMC Corp.

296 S.E.2d 503 (1982)

ANGOLA FARM SUPPLY & EQUIPMENT COMPANY, (a corporation) v. FMC CORPORATION, Spartan Equipment Company (a corporation) and Indfor Equipment, Ltd., (a corporation).

No. 813SC1248.

Court of Appeals of North Carolina.

November 2, 1982.

*506 Henderson & Baxter by Carl D. Lee and B. Hunt Baxter, Jr., New Bern, for plaintiff-appellant.

Ward, Ward, Willey & Ward by A.D. Ward and Joshua W. Willey, Jr., New Bern, for defendant-appellee FMC Corp.

Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston by Gaston H. Gage and Christian R. Troy, Charlotte, for defendant-appellee Spartan Equipment Co., Inc.

HEDRICK, Judge.

Plaintiff brings forward six assignments of error, many of which are interrelated and all of which pertain to the propriety of summary judgment.

The purpose of summary judgment is to bring litigation to an early decision on the merits without the delay and expense of trial when it can be readily determined that no material facts are in issue. Kessing v. Mortgage Corp., 278 N.C. 523, 180 S.E.2d 823 (1971). This rule provides a drastic remedy, and must be used with due regard to its purposes and with a cautious observance of its requirements so that no person shall be deprived of a trial on a genuine disputed factual issue. Id. G.S. § 1A-1, Rule 56(c) establishes the standard for determining a motion for summary judgment:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.

Plaintiff's first argument is that summary judgment was improper because there was a genuine issue as to whether plaintiff was damaged by defendants' breach of (1) the implied warranty of merchantability, (2) the implied warranty of fitness for a particular purpose, and (3) the express warranty given by defendant FMC to the plaintiff. This argument, as well as three other arguments brought forward by plaintiff, overlooks the material facts as to which there were no genuine issues and which were the grounds for the summary judgment: (1) there was no implied warranty of merchantability; (2) neither defendant implied a warranty of fitness for a particular purpose; and (3) the express warranty made by defendant FMC had been voided by plaintiff's actions with regard to the two log forwarders.

Under G.S. § 25-2-314, a warranty that goods are merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. "Merchantable goods" is defined in G.S. § 25-2-314(2). An implied warranty of merchantability may be excluded or modified, G.S. § 25-2-314, if done in accordance with the provisions of G.S. § 25-2-316. That statute requires that language excluding or modifying the implied warranty of merchantability "must mention merchantability and in case of a writing must be conspicuous." G.S. § 25-2-316(2). Under G.S. § 25-1-201(10), "conspicuous" is defined as that which is "so written that a reasonable person against whom it is to operate ought to have noticed it." Determination of whether writing is conspicuous is a question of law for the court. Billings v. Harris Co., 27 N.C.App. 689, 220 S.E.2d 361 (1975), aff'd, 290 N.C. 502, 226 S.E.2d 321 (1976). In the present case, FMC's written warranty specifically, in bold face, all capital print, excluded the implied warranty of merchantability. We believe that this satisfied the requirements for exclusion under G.S. § 25-2-316(2) and that there was, therefore, never any implied warranty *507 of merchantability as to the two log forwarders.

Plaintiff's claim that there was an implied warranty of fitness for a particular purpose is rejected for different reasons. Under G.S. § 25-2-315, there is a warranty of fitness for a particular purpose "[w]here the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller's skill or judgment to select or furnish suitable goods...." It is obvious from the undisputed facts of this case that the plaintiff purchased the two log forwarders from Indfor. Neither FMC nor Spartan was involved in the purchase and, therefore, neither could have known of a particular purpose for which plaintiff was purchasing the goods. Likewise, plaintiff could not have relied upon the judgment of parties not involved in the sale of the logging equipment. There was, therefore, no warranty of fitness implied by either defendant FMC or Spartan. Additionally, even if there could have been an implied warranty of fitness by FMC, the written warranty clearly excluded such warranty in a manner acceptable under the provisions of G.S. § 25-2-316.

Finally, as to the express warranty provided by FMC, we can find no dispute in the following material facts: FMC and Spartan originally provided warranty service on the equipment.[2] Spartan did this even though it was the non-selling distributor of the product. Under the terms of the Distributor Agreement, Spartan agreed, if requested by FMC, to provide service to FMC products which it did not sell but which were in its distributorship area. That agreement was clearly for the benefit of FMC and Spartan and was not enforceable against Spartan by plaintiff. Certainly Spartan was to be paid for such service since it had not received from the purchase price of the equipment an amount to cover the servicing costs. Through a letter to Spartan from plaintiff's president, plaintiff acknowledged this when it stated that it would be "responsible for paying for this [thirty day] service as I have made arrangements with Indfor to pay for these service inspections directly." When Spartan insisted on payment for service in advance, plaintiff, through its employees, made unauthorized repairs on one log forwarder by removing parts from other equipment including the second log forwarder purchased from Indfor. Unauthorized repairs voided the written warranty which, by its own terms, did "not apply to any product which has been subjected to ... adjustment, or repair performed by anyone other than FMC or a designated authorized agent." Based on these facts, we can find no genuine issue of material fact concerning plaintiff's voiding of the express warranty.

Plaintiff also argues that summary judgment was inappropriate because there was a genuine issue as to whether defendants' actions in refusing to provide plaintiff with a parts list constituted an illegal restraint of trade under Chapter 75 of the North Carolina General Statutes. Plaintiff alleged in its complaint that the two defendants refused to provide it with a list showing the names, identification, manufacturer, and fair market value of parts for the logging machines. In its argument now, plaintiff alleges that "one of the factors that caused the defendant corporations to cease providing warranty service ... was the questioning by ... [the] president and principal stockholder of the plaintiff corporation of the arrangements between FMC and Spartan [the two defendants] relating to the pricing of parts." This action, according to plaintiff, amounted to defendants' unfair assertion of power. We disagree. There is nothing in Chapter 75 which *508 would require equipment dealers or manufacturers to supply consumers with a list of parts such as plaintiff requested. There was, in the record of this case, no indication that either defendant prevented plaintiff from shopping elsewhere for parts for the equipment. In fact, plaintiff's president acknowledged that he had successfully gone to other suppliers for parts. We can find no illegal restraint of trade in defendants' refusal to supply the list requested by plaintiff.

Plaintiff's final argument is that the trial court erred in granting summary judgment for defendant Indfor. We do not read the final judgment "in favor of each defendant" to include Indfor, against whom a default judgment had already been entered.

Summary judgment against plaintiff is

Affirmed.

VAUGHN and HILL, JJ., concur.

NOTES

[2] It is also undisputed that, when plaintiff took possession of the two logging machines, the written warranty had expired by virtue of its clause limiting liability to a period of six months from the date placed in service or twelve months from the date of factory shipment. There is some dispute, however, as to whether defendant FMC, in a letter, extended the time period. The determination that the written warranty was no longer in effect is not, therefore, based on this fact.