Allen v. Rouse Toyota Jeep, Inc.

398 S.E.2d 64 (1990) 100 N.C. App. 737

Shelby Ogle ALLEN, Plaintiff,
v.
ROUSE TOYOTA JEEP, INC., formerly d/b/a Carolina Toyota, and Carolina Toyota, Inc., Defendants.

No. 8928SC1178.

Court of Appeals of North Carolina.

December 4, 1990.

Moore, Lindsay & True by Ronald C. True, Asheville, for plaintiff-appellant.

Mullinax & Alexander by William M. Alexander, Jr., Hendersonville, for defendants-appellees.

WELLS, Judge.

Plaintiff has assigned error to the trial court's conclusions that the value of the automobile was not substantially impaired and that it was not substantially impaired for its intended use. She also assigns error to the court's conclusion that there was a substantial change in the vehicle not due to any defect before the attempted revocation. We reverse and remand.

North Carolina General Statute § 25-2-608 provides in pertinent part:

(1) The buyer may revoke his acceptance of a ... commercial unit whose nonconformity substantially impairs its value to him....

(2) Revocation of acceptance must occur within a reasonable time ... and before any substantial change in condition of the goods which is not caused by their own defects....

Compliance with each of these statutory prerequisites to revocation involves questions of fact, not matters of law for the trial court. 4 Anderson, Anderson on the Uniform Commercial Code, § 2-608.20 (3rd ed.1982). While a fact-finder's resolution of a factual issue is generally binding for appellate purposes if supported by competent evidence, findings made under a misapprehension of law are not binding. Dishman v. Dishman, 37 N.C.App. 543, 246 S.E.2d 819 (1978). When faced with such findings, the appellate court should remand the action for consideration of the evidence in its true legal light. Hanford v. McSwain, 230 N.C. 229, 53 S.E.2d 84 (1949).

In any case of attempted revocation, the threshold issue is whether the good has a nonconformity which substantially impairs its value to the buyer. Resolution of this factual issue requires the application of a two-part test which considers both the buyer's subjective reaction to the alleged defect (taking into account the buyer's needs, circumstances, and reaction to the nonconformity) and the objective reasonableness of this reaction (taking into account the good's market value, reliability, safety, and usefulness for purposes for which similar goods are used, including efficiency of operation, cost of repair of nonconformities, and the seller's ability or willingness to seasonably cure the noncomformity). Wright v. O'Neal Motors, Inc., 57 N.C.App. 49, 291 S.E.2d 165, disc. review denied, 306 N.C. 393, 294 S.E.2d 221 (1982). It does not appear that the court applied this test in making the ultimate findings (mislabeled as conclusions of law) that the value of the car to plaintiff was not substantially impaired, and that it was not impaired for its intended use. The evidentiary findings reflect a substantial defect in the car, repeated, unsuccessful repair efforts, and plaintiff's continued use of the car. We are unable to determine whether the trial court gave appropriate consideration to plaintiff's subjective reaction to the vehicle's problems in the context of the objective criteria. The proper test to be applied is a "personalized objective test," or how a reasonable person would react if in the buyer's position. See 4 Anderson, § 2-608.23. Our review of the record reveals factual questions to be resolved under this analysis. We therefore remand for a proper resolution of this issue.

The court also concluded (found) that there was a substantial change in the condition of the car before the attempted revocation not due to any defect. Under N.C.Gen.Stat. § 25-2-608(2), this would bar any attempt at revocation. This conclusion (finding) is at odds with the court's conclusion (finding) that plaintiff's revocation occurred within a reasonable time. While there is authority from other jurisdictions which equates increased mileage with a substantial change in condition, see Ford Motor Credit Co. v. Mellor, 748 S.W.2d 410 (Mo.App.1988), we decline to adopt such a rule. When the defendant has made repeated assurances that the defect can be and will be cured, a delay in revocation to see if these assurances are met is not per se unreasonable. See City Nat. Bank of Charleston v. Wells, 384 S.E.2d 374 (W.Va. 1989). Particularly when dealing with an automobile, we decline to impose a rule that the good cannot be used during such a time period.

Because there are no errors asserted as to the conduct of the trial below, it is unnecessary to order a new trial. See Chemical Realty Corp. v. Home Federal Savings & Loan Ass'n of Hollywood, 65 N.C.App. 242, 310 S.E.2d 33 (1983), disc. review denied, 310 N.C. 624, 315 S.E.2d 689, cert. denied, 469 U.S. 835, 105 S. Ct. 128, 83 L. Ed. 2d 69 (1984). Accordingly, we reverse the judgment below and remand for further proceedings consistent with this opinion.

Reversed and remanded.

PARKER and DUNCAN, JJ., concur.

DUNCAN, J., concurred in this opinion prior to 30 November 1990.