Gregory v. Atrium Door and Window Co.

415 S.E.2d 574 (1992)

Larry F. GREGORY and wife, Dorothy S. Gregory, Plaintiffs,
v.
ATRIUM DOOR AND WINDOW COMPANY, a Texas Corporation, W.R. Jones Company, a North Carolina Corporation, and James R. Burris, d/b/a James R. Burris Construction Company, Defendants.

No. 9119DC468.

Court of Appeals of North Carolina.

April 21, 1992.

Woodson, Linn, Ford, Sayers, Lawther, Short, Parrott & Hudson by S. Edward Parrott, Salisbury, for plaintiff-appellees.

Thomas M. King, Salisbury, for defendant-appellant Atrium Door and Window Company.

No brief filed by defendants W.R. Jones Co. or James R. Burris, d/b/a James R. Burris Const. Co.

ARNOLD, Judge.

In its first two arguments defendant Atrium Door and Window Company contends that the trial court committed reversible error in finding that it gave plaintiffs implied warranties of merchantability and fitness for a particular purpose for the doors. Defendant attacks these findings as being unsupported by competent evidence. "Where a trial court sitting without a jury makes findings of fact, the sufficiency of those facts to support the judgment may be raised on appeal. The standard by which we review the findings is whether any competent evidence exists in the record to support them." Hollerbach v. Hollerbach, 90 N.C.App. 384, 387, 368 S.E.2d 413, 415 (1988) (citations omitted).

The trial court found that "Defendant[]... Atrium, in selling the windows and doors to the Plaintiffs for use in their residence, gave an implied warranty of merchantability concerning the windows and doors, and said implied warranty of merchantability was not excluded or modified by any actions of the parties." An implied warranty of merchantability (N.C.Gen.Stat. § 25-2-314 (1986)) and an implied warranty of fitness for a particular purpose (G.S. § 25-2-315) are based upon contractual theory. Richard W. Cooper Agency v. Irwin Yacht and Marine Corp., 46 N.C.App. 248, 251, 264 S.E.2d 768, 770 (1980). Plaintiffs were in privity of contract with defendant-retailer W.R. Jones Company, from whom they had purchased the doors, but were not in privity of contract with defendant-manufacturer Atrium Door and Window Company.

"[O]utside the exceptions created by G.S. Chapter 99B [products liability], the general rule is that privity is required to assert a claim for breach of an implied warranty involving only economic loss. See Holland v. Edgerton, 85 N.C.App. 567, 355 S.E.2d 514 (1987)." Sharrard, McGee & Co., P.A. v. Suz's Software, Inc., 100 N.C.App. 428, 432, 396 S.E.2d 815, 817-18 (1990). The trial court's findings reflect that only economic loss resulted from the alleged breach in the form of malfunctioning and deteriorating doors, along with some water damage to flooring. There is no competent evidence in the record of the privity between defendant Atrium and the plaintiffs required to support the trial court's findings and conclusion as to the alleged breach of these implied warranties. The judgment of the trial court is reversed.

While we are constrained by existing case law to reach this result, perhaps consideration should be given to whether the privity requirement for implied warranties is still good policy. Allowing consumers to bring direct actions against the manufacturer "avoids the chain of litigation which may otherwise be necessary to pursue liability up the chain of distribution." 16 A.L.R.3d 683, 690 § 2 (1967).

Reversed.

LEWIS and WYNN, JJ., concur.