Scheirman v. Coulter

Scheirman v. Coulter
1980 OK 156
624 P.2d 70
Case Number: 53000
Decided: 10/21/1980
Modified: 10/24/1980
Supreme Court of Oklahoma

DONALD L. SCHEIRMAN D/B/A TREASURES UNLIMITED, APPELLEE,
v.
PAULA THEOBALD COULTER, APPELLANT.

Appeal from the District Court of Tulsa County, David Winslow, Judge.

¶0 Appellant appeals from judgment entered by the trial court in which it determined that she had defaulted on an installment sale contract for cookware and ordered attorney fees.

AFFIRMED IN PART, REVERSED IN PART.

Richard L. Blanchard, Tulsa, for appellee.

Seigel, Cassidy & Oakley by Sam H. Cassidy, III, Tulsa, for appellant.

HODGES, Justice.

[623 P.2d 71]

¶1 This appeal involves a consumer credit sale of cookware in the amount of $457.15. The appellants seeks recovery on the basis of a purported violation of the Uniform Commercial Code [UCC], 12A O.S. 1971 § 2-313 . It is also asserted by appellant that the Uniform Consumer Credit Code [UCCC], 14A O.S. 1971 § 2-413 , precluded the awarding of attorney fees to appellee.

¶2 The buyer-appellant, Paula Theobold Coulter, contends that she should be permitted to recover on the contract because the appellee, Donald L. Scheirman, d/b/a Treasures Unlimited, breached an express warranty in concluding a retail installment contract for the sale of Aristo Craft Cookware. It is alleged that the seller-appellee told the buyer-appellant that the cookware could not be purchased in retail stores and could never be purchased at discount prices because it was only available from a distributor. The buyer, a marketing and economics major, had seen the cookware demonstrated while she was attending college. However, she could not afford to buy it at that time. After graduation she contacted the seller for a further demonstration. The seller told her that: Aristo Craft and Royal Queen could only be sold through a distributor; Aristo Craft had been deactivated; it was no longer being manufactured; and West Bend made one line of cookware for sale by a distributor and another for retail sale. The seller recommended that she purchase the new line, Royal Queen, and she entered into a contract for its purchase. She was told she could change to Aristo Craft if she still liked it better after she "slept on it." The buyer called the seller the next day and substituted Aristo Craft for Royal Queen. Several weeks after the sale, the buyer noticed a newspaper advertisement offering the cookware on sale for $99.99. The buyer investigated the advertisement by going to Dillard's Department [623 P.2d 72] Store to examine the pots and pans. The buyer concluded that the cookware was identical to that which she had purchased from the seller. After notifying the seller of her conclusion, she defaulted on the installment sale contract.

¶3 The seller sought to recover $384.57, the balance due on the contract, by filing an action in small claims court. The cause was transferred to the district court on the buyer's motion.

I

¶4 The buyer contends that the statement the pots and pans were only available through distributors and would not be sold at a reduced price constituted express warranties. The question of whether an express warranty exists is for the trier of the facts.

II

¶5 The buyer insists that even if there was not an express warranty, the contract was unconscionable, unenforceable due to mutual mistake, and that the seller participated in fraud and negligent misrepresentation. These allegations were rejected by the trial court. It found that: the buyer only became dissatisfied after she discovered, six weeks later, the cookware was being closed out at a lower price; she entered the transaction with her "eyes open" and she was aware of the cost of the merchandise when she requested a demonstration by the seller. The buyer's testimony also reflected that she insisted on purchasing the discontinued line rather than the new one suggested by the seller. The evidence simply does not support her assertions of fraud, unconscionability, negligent misrepresentation or mistake.

III

¶6 The appellant argues that the court was precluded by 14A by O.S. 1971 § 2.413

¶7 Involved in our case is a consumer credit sale. As such, we must apply the specific statute which prohibits allowance of attorney fees if the sale is less than one thousand dollars and the credit service charge exceeds ten percent.

¶8 In this case the consumer credit sale was for $457.15, with an annual interest rate of 18.75 percent; thus, the specific statute of 14A O.S. 1971 § 2-413 is applicable. We, therefore, find error in the award of an attorney fee.

¶9 AFFIRMED IN PART, REVERSED IN PART.

¶10 LAVENDER, C.J., IRWIN, V.C.J., and WILLIAMS, BARNES, DOOLIN, HARGRAVE and OPALA, JJ., concur.

Footnotes:

1 Actions may be transferred from the small claims court to district court pursuant to 12 O.S.Supp. 1978 § 1757 . The statute in effect at the time required a court cost of $25.00.

2 Eden v. Vloedman, 202 Okl. 462, 214 P.2d 930 (1950).

3 It is provided by 12A O.S. 1971 § 2-313 (2):

"It is not necessary to the creation of an express warranty that the seller use formal words such as `warrant' or `guarantee' or that he have a specific intention to make a warranty, but an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty."

4 The official comment to 7 Uniform Laws Annotated Consumer Credit Code, § 2-413, p. 377 (1978) states that this section reflects a policy decision to treat attorney fees not as a part of seller's general overhead to be indirectly imposed on all his customers. The charge initially is imposed at least in part to the defaulting buyer who gives rise to the expense. Apparently it was enacted to protect buyers from having to pay more than their contractual debt when defending against a collection action. The recovery for attorney fees is generally contemplated to be a part of the contract price.

5 The UCCC, 14A O.S. 1971 § 2-413 , provides that no attorney fee may be assessed in transactions involving less than one thousand dollars if the credit charge exceeds ten percent:

"With respect to a consumer credit sale or with respect to a consumer lease the agreement may provide for the payment by the buyer or lessee of reasonable attorney's fees not in excess of fifteen percent (15%) of the unpaid debt after default and referral of an attorney not a salaried employee of the seller, or of the lessor or his assignee; provided, however, that no attorney's fee shall be allowed if the amount financed is One Thousand Dollars ($1,000.00) or less and the credit service charge exceeds ten percent (10%) per year calculated according to the actuarial method. A provision in violation of this section is unenforceable."

6 Attorney fees are awarded to the prevailing party on a contract involving the sale of merchandise under 12 O.S. 1971 § 936 :

"In any civil action to recover on an open account, a statement of account, account stated, note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, or for labor or services, unless otherwise provided by law or the contract which is the subject of the action, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs."

7 Attorney fees are taxed as costs and allowed to the prevailing party pursuant to 12 O.S.Supp. 1975 § 939 :

"In any civil action brought to recover damages for breach of an express warranty or to enforce the terms of an express warranty made under Section 2-313 of Title 12A of the Oklahoma Statutes, against the seller, retailer, manufacturer, manufacturer's representative or distributor, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, which shall be taxed and collected as costs."

8 This statute, 12 O.S.Supp. 1978 § 1757 , was found to be constitutional in Thayer v. Phillips Petroleum Co., 613 P.2d 1041 (Okl. 1980). It provides in pertinent part:

"On motion of the defendant the action shall be transferred from the small claims docket to another docket of the court, provided said motion is filed and notice given to opposing party at least forty-eight (48) hours prior to the time fixed in the order for defendant to appear or answer and, provided further, that the defendant deposit the sum of Thirty-five Dollars ($35.00) as the court costs, . . . If the plaintiff ultimately prevails in the action so transferred by the defendant, a reasonable attorney's fee shall be allowed to plaintiff's attorney to be taxed as costs in the case."