Bone International, Inc. v. Johnson

329 S.E.2d 714 (1985)

BONE INTERNATIONAL, INC.
v.
Charles O. JOHNSON.

No. 847DC1004.

Court of Appeals of North Carolina.

May 21, 1985.

Fields, Cooper & Henderson by Roy A. "Coop" Cooper, III, Rocky Mount, for plaintiff-appellee.

Farris & Farris by Thomas J. Farris and Robert A. Farris, Jr., Wilson, for defendant-appellant.

ARNOLD, Judge.

This is an appeal from an order of summary judgment granted plaintiff in its suit to recover payment for repair work done on two trucks owned by defendant. We must, therefore, determine whether or not the forecast of evidence given by the parties presented a genuine issue of material fact.

Plaintiff claims that defendant owes him $19,567.39 plus interest pursuant to an express agreement for repairs on two White Road Commander trucks. Plaintiff sold these trucks to defendant in November, 1980. They were used at time of sale. On the face of the written purchase money security agreements entered into by the parties in connection with the sale, plaintiff disclaimed any express or implied warranties on the trucks. The bills of sale also had typed on them the words "NO WARRANTY." Plaintiff argues that these written disclaimers and the alleged agreement for repairs should control the disposition of this case.

Defendant claims, however, that within a few days after his purchase of the trucks he discovered that the particular fleet of which they were a part had had major engine problems and had been the subject of a recall from the manufacturer. In addition, he discovered that the trucks he had purchased had not been returned for repairs.

Defendant testified by way of deposition that he immediately returned to plaintiff's place of business and discussed cancellation of the sale. Yet, he said, Dolen Atkinson, plaintiff's employee, assured him that the trucks would be repaired free of charge if they developed major engine problems. Defendant testified that he decided not to seek to cancel the sales contracts when he received this assurance from plaintiff's employee. In his answer to plaintiff's interrogatories, defendant also says that he asked Mr. Atkinson whether they should put their agreement as to repairs in writing, and Atkinson indicated that that was not necessary because plaintiff had never gone back on its word to defendant.

Defendant's trucks developed engine problems and were taken into plaintiff's garage by defendant's drivers. Plaintiff sent monthly bills to defendant for the repairs. Defendant did not pay them. Defendant claims that he contacted plaintiff about the bills, and reminded plaintiff's owner of the previous agreement as to free repairs, and that plaintiff agreed to adjust the amount of the bills. Defendant says he assumed plaintiff would omit charges for the engine repair, because of the prior understanding that the work would be done free. Defendant testified that plaintiff's owner told him that he was billed and that the bills were inflated so that plaintiff could present a large accounts receivable figure to a bank in its application for a loan. Defendant testified also that if he had known he was going to be charged for the repairs he would have had a local mechanic do the work for one-third the cost.

When defendant purchased the trucks from plaintiff, the purchase money security agreements signed by defendant clearly indicated that plaintiff made no express or implied warranties of merchantability or otherwise on the trucks. These disclaimers satisfied G.S. 25-2-316(2), which applies since they were part of an agreement involving the sale of goods. Defendant's post-sale agreement with plaintiff to do major engine repairs without charge constituted an oral modification of the original written agreement that there were no warranties. This subsequent agreement was not subject to the parol evidence rule. Further, under G.S. 25-2-209(1), this "agreement modifying a contract within this article [concerning sales under the Uniform Commercial Code] needs no consideration to be binding."

The defendant's testimony as to the oral modification thus raises a statutory defense to plaintiff's suit and so creates a genuine issue of material fact, precluding summary judgment.

We observe that the parties failed to plead or to raise, and so waived, the issues of the statute of frauds, see G.S. 25-2-209(3), waiver of the disclaimers, G.S. 25-2-209(4), and retraction and estoppel, G.S. 25-2-209(5). The pertinent sections of the Code read as follows:

(3) The requirements of the statute of frauds section of this article (§ 25-2-201) must be satisfied if the contract as modified is within its provisions.

(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver.

(5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

Had those issues been raised, on the facts as presented we would have reached the same result: that the summary judgment was improper. Even though there was no writing evidencing the oral modification, the defendant presented evidence that the plaintiff orally waived the written disclaimers and that defendant relied on this waiver to his detriment. This created an issue of fact for the jury on the question of waiver under G.S. 25-2-209(4)-(5), which is not subject to the statute of frauds.

The order of summary judgment was improperly entered.

Reversed.

MARTIN and PARKER, JJ., concur.