Mallory v. Conida Warehouses, Inc

134 Mich. App. 28 (1984) 350 N.W.2d 825

MALLORY
v.
CONIDA WAREHOUSES, INC.

Docket No. 69563.

Michigan Court of Appeals.

Decided April 17, 1984.

Fortino, Plaxton & Moskal (by Charles M. Fortino), for plaintiffs.

Smith & Brooker, P.C. (by Richard G. Smith and Mona C. Doyle), for defendant, third-party plaintiff and appellant Conida Warehouses, Inc.

Seavitt, Westcott & Stowe (by Michael J. Yockey), for third-party defendant and appellee, C & B Cattle Company.

Before: J.H. GILLIS, P.J., and SHEPHERD and J.J. KELLEY,^[*] JJ.

PER CURIAM.

Conida Warehouses, Inc., appeals as of right from a jury verdict entered in favor of both plaintiffs following a four-day jury trial. Conida sold light-red kidney bean seed to both plaintiffs. Once planted, the beans developed a disease commonly known as halo blight. After opening arguments, the trial court dismissed Conida's third-party complaint against C & B Cattle Co. The jury found that the bean seed was defective, that the defect existed at the time the seed left Conida's control and that this defect was the proximate cause of plaintiffs' damages. The jury awarded $10,950 in damages to plaintiff Mallory and $34,500 in damages to plaintiff Nestle Farms.

The trial court properly found that Conida's warranty disclaimer was ineffective, thereby removing Conida's defense to the implied warranty claim.

In ruling on the warranty disclaimer issue, the trial court found:

A. There is no disclaimer of warranty created by trade usage because there is no mutual understanding between seed growers and farmers on the existence of such a warranty;

B. The warranty tag attached to the seed bag mentions merchantability;

C. The word "warranty" appears in capitalized letters at the top and the balance of the language is in standard type size;

D. There was no contrasting color or particular emphasis on any portion of the asserted disclaimer;

E. The tag was attached with two other tags to the bottom of the bag and was not in a "particularly conspicuous location", given that it was under two other tags;

F. The warranty tag was the least conspicuous bit of writing on the bag;

G. The heading "Warranty" would suggest that warranties were included rather than excluded; and

H. The plaintiffs were experienced buyers, but this experience did not include any particular familiarity with legal terms of the law of warranty.

The trial court did not err in finding that the tag was inconspicuously placed. MCL 440.2316, 440.2316(2); MSA 19.2316, 19.2316(2); White & Summers, Uniform Commercial Code (2d ed), § 125, pp 437-444; Anno: Construction and effect of UCC § 2-316(2) providing that implied warranty disclaimer must be "conspicuous", 73 ALR3d 248.

The trial court also did not err by finding that the warranty was not waived by trade usage. MCL 440.2316(3)(c), 440.1205(2); MSA 19.2316(3)(c), 19.1205(2); White & Summers, supra, § 12-6, pp 454-457; Hartwig Farms, Inc, v Pacific Gamble Robinson Co, 28 Wash App 539; 625 P2d 171 (1981).

Because the trial court correctly found that the implied warranty of merchantability had not been excluded, the court did not err by submitting the question of breach of that implied warranty to the jury. Since the sale of the seeds in question was clearly subject to the provisions of the Uniform Commercial Code, MCL 440.2102, 440.2105(1); MSA 19.2102, 19.2105(1), that the goods be merchantable is implied in the contract of sale. MCL 440.2314; MSA 19.2314. Our review of the record reveals that the jury was properly instructed on this issue.

The trial court's finding that limiting the remedy to the purchase price of the seed was unconscionable under MCL 440.2302; MSA 19.2302 was not clearly erroneous. Majors v Kalo Laboratories, Inc, 407 F Supp 20, 23 (MD Ala, 1975).

The jury was properly instructed on the measure of damages. MCL 440.2714, 440.2715; MSA 19.2714, 19.2715.

The trial court did not err in dismissing C & B Cattle Comnpany as a third-party defendant at the end of Conida's opening statement. Conida's complaint against C & B was for indemnity and contribution based on C & B's alleged negligence. Here, Conida failed to state the ultimate facts proposed to be proved and essential to its cause of action. Although Conida stated that the beans were under the control of C & B, it never stated that C & B was negligent. Further, Conida declined the opportunity to supplement its opening statement. GCR 1963, 507.1; Haynes v Monroe Plumbing & Heating Co, 48 Mich App 707, 712-713; 211 NW2d 88 (1973).

Last, the trial court did not abuse it discretion by refusing to allow Conida, at trial, to amend its pleadings to include comparative negligence and mitigation as affirmative defenses. At no time during the more than four years between institution of the suit and the trial, during which four pretrial conferences were held, did defendant seek to amend. GCR 1963, 111.7, 118.3, 301.1(1); Messer v Floyd Rice Ford, Inc, 91 Mich App 644; 284 NW2d 139 (1979), rev'd on other grounds 407 Mich 962 (1980).

Affirmed.

SHEPHERD, J. (concurring in part and dissenting in part).

I dissent on the issue of dismissal of C & B Cattle Company as a third-party defendant at the end of Conida's opening statement. Counsel said in his opening statement that the seeds may have become diseased while under C & B's control. I believe that this is enough to allow Conida to proceed with trial. I also dissent on the issue of whether the trial court abused its discretion in refusing to allow Conida at trial to amend its pleadings to include comparative negligence and mitigation as affirmative defenses. Plaintiff admitted that there was no surprise and the issues of comparative negligence and mitigation of damages were clearly placed on the record in the course of depositions.

I concur with the balance of the Court's opinion.

NOTES

[*] Circuit judge, sitting on the Court of Appeals by assignment.